Скачать или смотреть EDF payment | Back To Back Deferred Payment | Back to Back Usance Payment | Sight Payment | EDF

What is EDF (Export Development Fund)?
Let's briefly explain what EDF is. The government established the Bangladesh Bank Export Development Fund (EDF) in 1989 under the IDA Export Development Scheme with the aim of developing the country's export trade/increasing export earnings. The purpose of EDF is to provide EDF Loans at low interest to prepare, facilitate and assist exporters to enter the global market. As a result, after opening the letter of credit for the purpose of importing raw materials for the exporters to complete their exports, EDF Loans are accepted for payment on-site basis.

What is EDF/Sight Payment?
Available by Sight: Against all the loans, the bill is paid only when the documents are properly presented by the beneficiary following all the conditions (Complying Presentation), it is called Available by Sight. Usually, the Issuing Bank's account with the reimbursing bank is debited as soon as the Conforming Documents are visible to the Nominated Bank / Negotiating Bank: Paying the bill is the main feature of this condition. If Add. Confirmation is imposed, but documents submitted to the Confirming Bank (Conforming Documents)

What is Deferred Payment?
Available by Deferred Payment The LC against which the bill amount will be paid to the beneficiary after a specified period is called Available by Deferred Payment. For example, if the LC stipulates that the bill price will be paid 90 days after the presentation of documents or 180 days from the date of the bill of lading i.e. 180 days from the date of shipment of the goods, then it is a Deferred Payment LC. Provided that the presentation of documents must be Complying Presentation.

After presenting the duly executed documents, the Nominated Bank or the Presenting Bank will send the documents to the Issuing Bank and the Issuing Bank will inform the Nominated Bank or the Presenting Bank of the maturity date of the bill as per the terms of the LC. Beneficiary at this stage. On application, Nominated Bank will pay an advance amount to the beneficiary based on the maturity date and acceptance.

It is especially noted that in Deferred Payment LC no draft is required to be prepared by the beneficiary. Several countries in the world levy heavy duty on draft against LC. Mainly to avoid paying this big amount blindly, draft issues against Deferred Payment LC is avoided in international business. If the letter of credit is Confirmed LC, the Confirming Bank will pay the bill amount to the beneficiary by debiting the account of the Issuing Bank on the specified date. And if Confirmed LC is not, then the Nominated Bank will decide on the advance payment of the bill price considering the financial condition of the Issuing Bank and the applicant's country, business reputation, and other factors. This is solely a matter under the jurisdiction of the Nominated Bank. However, such L/C usually includes adding confirmation.

What is Acceptance Payment?
Available by Acceptance: Beneficiary makes usance draft drawn on Negotiating Bank / Nominated Bank against LC with such conditions. Acceptance is given for payment of the bill amount at a future date as per the terms mentioned in the LC. In this case, the Nominated Bank which gives acceptance to the supplier is also called Accepting Bank. Usance drafts are generally 30, 60, 90, 120, or 180 days. In our country, BTB is used as opposed to LC.

If Add Confirmation is not given in the letter of credit, Negotiating Bank/Nominated Bank or Advising Bank is not bound to accept the draft. But usually, the draft is drawn on the bank with which the beneficiary has been doing business with a reputation for a long time and the bank gives acceptance considering the past reputation of the customer. Note that if the Nominated Bank does not accept the draft against the Complying Presentation as per Article - 7 (iv) of UCP-600, then the Issuing Bank must give the Acceptance and pay the bill amount on the specified date. And if Add Confirmation is imposed on the letter of credit, then against the Complying Presentation presented by the Nominated Bank, the Confirming Bank must give acceptance against the draft and pay the bill price on the specified date (Article-8).

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