Increasing cross border trade presents an international trader with many challenges. A corporate having a currency exposure due to imports/exports, apart from effectively managing the currency risk are also concerned about reducing the interest cost linked to the same. Especially in certain sectors, where the margins are wafer thin, the additional avenue for an importer/exporter would be to reduce costs so as to improve his bottom line.
Today the business world is ever - changing and expanding. Global outreach has become a large portion of the business landscape. At Greenback, we can help your business grow by providing you with the various financial structures. Our Trade Finance department is part of a worldwide banking network ready to fulfill your business trade needs.
To assist your import/export business, our syndication team can help you find international banks providing Libor linked finance and guide you on the ways to reduce the cost of financing the transaction. With more than a decade old experience, we may be able to help you reduce your banking costs thus improving your balance sheets.
We operate on a large and continuously expanding network across the country. By virtue of our relationship with over 2000 corporate clients all over India as well as clients overseas, we thoroughly understand different industrial sectors and can structure products so as to cater to the needs of an individual corporate. This has led us to becoming a six billion dollar syndication desk. High market penetration, extensive banking network and high volumes, makes it possible for Greenback to effectively sell bank and country risk.
We have a full-fledged trade finance setup arranging for the following trade related requirements.
UPAS / Suppiers Credit
Usance Paid at sight or Suppliers credit is a structure wherein usance LCs are discounted and supplier gets paid on sight basis. Interest charges are generally borne by the Importer. Suppliers credit helps local importers gain access to cheaper foreign funds close to LIBOR rates as against local sources of funding which are steep as compared to LIBOR rates.
These are the most common and popular structures in India, wherein trade credits are extended to corporate on the back of an undertaking from Indian banks, for both L/C as well as non L/C D/A imports. Here again the local importer has access to overseas funds at cheaper rates.
Export LC discounting
Here we can help the exporter discount usance LCs at Libor – linked rates. The exporter is thus benefitted to cheaper cost of funds. It may also be obtained outside the consortium banks.
Export Credit Agencies, commonly known as ECAs, are public agencies and entities that provide government-backed loans, guarantees and insurance to corporations from their home country that seek to do business overseas in developing countries and emerging markets.
ECAs are now the world's biggest class of public finance institutions operating internationally. Many banks provide long term funds from 5-10 years for import of machinery/ capital through approved ECA backed by insurance.
This structure gives access to long term overseas finance at cheaper rates.
Local LC discounting
In in endeavour to provide additional services we can also arrange for funding in local currency. Usance LCs which are opened for local sales are discounted at attractive rates. There is a twofold advantage in the same. The Supplier gets paid on sight basis. The Buyers gets cheaper source of funds. Further the Supplier can also get the same discounted outside its consortium bank with basic KYC.
This is another financing structure wherein a usance LC is routed through beneficiary's bank and Greenback arranges a reimbursing bank who would finance the beneficiary on receipt of claim from the beneficiary bank and post acceptance from the LC opening bank.
The importer enjoys multiple benefits from this structure
- The documents are negotiated with the beneficiary bank
- The importer receives foreign currency funds at cheaper costs
- The reimbursement clauses are inbuilt into the LC