• Copy
of supply contract, or of its payment terms
• Copy of shipping documents including certificates of receipt,
railway bill, airway bill, bill of lading or equivalent documents
• Copy of signed commercial invoice
• Letter of assignment and notification to the guarantor
• Letter of guarantee, or aval ( a form of guarantee from
internationally recognized and credit worthy bank)
• A blank endorsement by a guarantor can be a substitute
for aval .
• SBLC(Standby letter of credit ) can also be used.
What is KYC?
‘Know Your Client’
or KYC is a set of credential of present owners/partners of the
beneficiary of Trade Finance Instrument. These essential documents
are needed by the bank specially to know exporters thoroughly.
KYC contains generally following
documents :
• Copy of Resgistration
(CR)
• The MOU of association
• Copy of Articles of association
• Latest audited financial reports from Chartered Accountant.
• Passport copies of each aurthorised signatory.
• Original copy of latest Water / Electricity Bills of
the company
• Original electricity bill of each authorized signatory
• Details of the company’s bank account.
What is aval/ avalisation
?
Generally the importer’s
credit facility is supported by a valid trade finance instrument
such as BOE, BG etc. The value is added to the paper by the bank’s
guarantee, by the way of ' per aval '
endorsement. The process is called as avalisation and equally
the receivables may take the form of a term draft drawn under
a documentary letter of credit.
The aval is the Forfaiters' preferred form of security of payment
of a bill or note. The aval may be placed on the face of the note.Somecountries,
where aval is not legally binding, guarantee is issued.Usually
it is provided in a separate letter.
