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Back to Back Letter of Credit

Back-To-Back Letter of Credit would be issued by the Bank in favor of your supplier on the basis of Master Letter of Credit received from the Buyer on back-to-back or similar terms. Facility is available to the credit customers at the Overseas Branches in UAE, Singapore, and GIFT City

Features & Benefits

Conserves the capital, and helps the customer avail non-funded bank limits to finance their raw material purchases with minimal balancesheet support

Convenient and safe means to finance the cross-border trade of Bulk industrial raw materials

Large Commodity Traders benefit from the wide network of Axis Bank’s customer relationships in India, and wide network of correspondent banking relationship

Facilitate cross border transactions while minimizing country risk concerns for the customer

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averagePaperless Exports- How it Works?

How it Works?

  • 01

    Customer of the Bank enters into Back-to-Back Sales Contract and Purchase Contract with the Buyer, and Supplier, respectively.

  • 02

    Axis Bank reviews the transaction documents, and ascertains if the various conditions mentioned in the Sanction Letter are met

  • 03

    Buyer issues Master LC from an acceptable financial Institution and transmits it to the Axis Bank counters.

  • 04

    Axis Bank reviews Master LC, and BTB LC application, and issues Back-To-Back LC to the Supplier as per the agreed credit terms with the Client.

  • 05

    Supplier ships the goods and presents documents under the Back-To-Back LC through its relationship bank or directly to Axis Bank branch and claims credit.

  • 06

    Customer provides/ substitutes certain documents and makes presentation under the Master LC

  • 07

    The presentation is discounted, and payment is made to the Supplier under the Back-To-Back LC. From the residual amount, the Bank recovers the applicable transaction charges etc and the rest is remitted to Customer as profit

  • 08

    Documents under Master LC are presented to the Buyer’s bank, and Bank claims credit against documents.

Disclaimer

Product offering is subject to certain eligibility criteria as per Bank's internal policy and is subject to Bank's discretion

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