Chinese company to get Tk 1,200cr this month

[Zabaniyah]

In short, exports doing business without letter of credits are fools ! No one would risk an export without a guarantee or Letter of credit
If these Bangladeshi exporters had LC, they would have been compensated straight away by the bank

AGAIN THESE ARE PRIVATE CONTRACTS

contracts with govt are always backed by Bank Guarantee

For exports in Bangladesh, it is acceptable to receive payments on an open account basis. Though, this is only for exports, and big orders, like for Wal-Mart in USA and such. In fact, much of the world's transactions occur through the open-account basis, particularly in the Western World.

For imports exceeding $10,000, they must be opened through LC under UCP600, ISBP, IPO, GFET and other provisions.

If a bank does not honor, that is reported globally in the media, and that hurts the bank's reputation. It's a violation as per UCP.

Bangladesh Bank had become strict about the matter:
Banks to be fined for failure to pay foreign parties for LCs

"These exporters are as per ICC Publication 600 are likely to be categorized as bank defaulters and they will not able to pay workers wage only because of non-payment of Lilliput Kidswear," feared Rahman.

Funny, it doesn't say anything about exporters. It is the issuing bank. Bank to bank transactions are separate from the contractual relations between supplier and buyer as per UCP.

And since he is referring UCP 600, then most certainly it was issued through an LC by the issuing banks in India. They are the ones bearing that liability. So they can do so at their own risk and responsibility.

Can anyone give me a list of those banks working with the exporters in India? I want to know about those specific banks.

 

[Mr.S.Singh]

For exports in Bangladesh, it is acceptable to receive payments on an open account basis. Though, this is only for exports, and big orders, like for Wal-Mart in USA and such. In fact, much of the world's transactions occur through the open-account basis, particularly in the Western World.

For imports exceeding $10,000, they must be opened through LC under UCP600, ISBP, IPO, GFET and other provisions.

If a bank does not honor, that is reported globally in the media, and that hurts the bank's reputation. It's a violation as per UCP.

Bangladesh Bank had become strict about the matter:
Banks to be fined for failure to pay foreign parties for LCs

Exporters should ask for Bank guarantee or LC, this is a wrong practice, no matter how well you may know the person it takes seconds for that person to flip
i have worked in a bank with international finance, RBI has made special emphasis on exports and importer to deal with LC

 

[TopCat]

Exporters should ask for Bank guarantee or LC, this is a wrong practice, no matter how well you may know the person it takes seconds for that person to flip
i have worked in a bank with international finance, RBI has made special emphasis on exports and importer to deal with LC

Did you not read the news? It was done under LC. Goods were exported, importer received the goods in good condition. But Indian Banks are not releasing the money saying that the importer did not have deposited the amount they owe to the bank. Its the matter between the importer and the bank and nothing to do with Exporter in Bangladesh but as it is India, rules are not what suppose to be applied.

 

[Mr.S.Singh]

Did you not read the news? It was done under LC. Goods were exported, importer received the goods in good condition. But Indian Banks are not releasing the money saying that the importer did not have deposited the amount they owe to the bank. Its the matter between the importer and the bank and nothing to do with Exporter in Bangladesh but as it is India, rules are not what suppose to be applied.

there is no mention of Letter of credit transaction sir, L/C transaction takes place between bank of exporter and bank of importer on behalf of both parties, hence there is no chance of default payment, unless the goods are rejected under clauses included in the L/C

all the articles says that export procedures were followed that mean quality control and FOB documentation was done

@idune @eastwatch
The company was inserious debt in 2011, i don't know how you can trade with a company freely without certain security
I am sorry but i would call it ignorance of the exporters

Lilliput Kidswear gets more time to repay debts - Livemint
Why investing in kids wear is no child’s play | Business Line
Sanjeev Narula to sell debt-ridden Lilliput - Economic Times

 

[Zabaniyah]

Exporters should ask for Bank guarantee or LC, this is a wrong practice, no matter how well you may know the person it takes seconds for that person to flip
i have worked in a bank with international finance, RBI has made special emphasis on exports and importer to deal with LC

True, there is no direct mention of an LC. Albeit, a poorly written article.

But do explain why he mentioned the bold part:

"These exporters are as per ICC Publication 600 are likely to be categorized as bank defaulters and they will not able to pay workers wage only because of non-payment of Lilliput Kidswear," feared Rahman.

And since you say you used to work at a bank in trade services, you should have noticed that by then.

there is no mention of Letter of credit transaction sir, L/C transaction takes place between bank of exporter and bank of importer on behalf of both parties, hence there is no chance of default payment, unless the goods are rejected under clauses included in the L/C

all the articles says that export procedures were followed that mean quality control and FOB documentation was done

From where did you get the notion that banks always honor letters of credit? It does sadly happen. But LC's are the most secured means of settlement compared to other methods. What is said in theory, does not equate in practice.

And where in the article does it mention Incoterms and PSI? Can you kindly point those from your experience in trade services?

Did you not read the news? It was done under LC. Goods were exported, importer received the goods in good condition. But Indian Banks are not releasing the money saying that the importer did not have deposited the amount they owe to the bank. Its the matter between the importer and the bank and nothing to do with Exporter in Bangladesh but as it is India, rules are not what suppose to be applied.

Read this part:

He said those who sent garments to the Indian company received by the freight forwarder but it cleared the goods without submitting proper documents to the concerned banks.

Sounds impossible. The issuing bank didn't even receive bills of entry? How can they clear goods before settlement? Was there a shipping guarantee? Gosh, what awfully run banks....

If something like that were to happen in Bangladesh, the exporter and the bank can get into serious legal trouble. Akdom jaile nea jabhe.

 

[Mr.S.Singh]

True, there is no direct mention of an LC. Albeit, a poorly written article.

But do explain why he mentioned the bold part:

because exporters may have taken loan from bank to fulfill their orders and cannot payback now, also there is a rule, in India, don't know about Bangladesh, exporters become defaulters when they do not show the money received(dollars) as most exporters get tax break for bringing in dollars ... i am not sure, for which are they being defaulted here

From where did you get the notion that banks always honor letters of credit? It does happen. What is said in theory, does not equate in practice.

because it is the promise of payment made by importers bank to exporters bank sir, it has to be done no way out if clauses are satisfied

And where in the article does it mention Incoterms and PSI? Can you kindly point those from your experience in trade services?

incoterms are printed on the letter of credit floated by the importer to the exporter, before being printed both importer and exporter can negotiation on the terms; before it is signed and authorized by both and their banks

Condition can warry
payment of release from receipt of good at port , to proper inspection, there are number of clauses they can put for their protection

some importer even ask for quality control certificate by govt of the country of exporter

 

[Zabaniyah]

because exporters may have taken loan from bank to fulfill their orders and cannot payback now, also there is a rule, in India, don't know about Bangladesh, exporters become defaulters when they do not show the money received(dollars) as most exporters get tax break for bringing in dollars ... i am not sure, for which are they being defaulted here

because it is the promise of payment made by importers bank to exporters bank sir, it has to be done no way out if clauses are satisfied

incoterms are printed on the letter of credit floated by the importer to the exporter, before being printed both importer and exporter can negotiation on the terms; before it is signed and authorized by both and their banks

Condition can warry
payment of release from receipt of good at port , to proper inspection, there are number of clauses they can put for their protection

some importer even ask for quality control certificate by govt of the country of exporter

There's no need to call me sir.

I asked you to point out where in the specific article posted by @idune . Not theories.

 

[Mr.S.Singh]

There are different kinds of trade financing here in the form of loans. And it is the job of the bank to analyze their client's credit report. That's the job of a bank's credit department. And there's usually a limit imposed by a good bank based on that credit report.

Different loan amounts and margins can apply for different merchandise as well. If that really happened, then those banks are doing a poor job at it.

i think the Bank finances their series of exports, and provides them with working capital, the bank must have put them on default list and blocked financing and their accounts

And I know that. And even then, dishonor does happen. Why do you think dispute settlement and docdex exist?

Again disputes happen because
Clauses aren't meet
importer tells their bank that clauses of import aren't met, and if the bank is satisfied with the reason given by the importer, payment is blocked untill settlement is reached

For for the record, the issuing bank did not even receive the documents from the importer as per the article. And yet, goods have been released in the Indian port. How?

I am still uncertain if the said transaction actually happened with LC,
even if it has happened with LC, once the goods have been reached the Indian port, (The shipping agency) gives delivery confirmation to the exporter and importer, then its the importers duty to clear the goods, pay taxes and release the goods, once this happens, (normally both the bank are in the loop)
The importers bank then request the importer to furnish documents (when the exporter receives the shipping agencies confirmation, he passes it on to exporters bank, which passes it on to importers banks, so they know goods have reached the port)
The importer has to furnish the receipts/or explain why the goods haven't been cleared, after receipts are furnished to the importers bank, the importers bank makes payment to exporters bank

It still doesn't change the fact that the banks that issued those LCs are still liable.
.

yes they are liable, but if the importer says certain clauses arent met, there is a dispute

Again, I know those. And yet, I asked you to point out where in the article posted by @idune . Not theories.

The article isnt clear about
firstly Letter of Credit
Conditions
thirdly the importing company isnt doing well, but if there was an LC, then the bank must have got the required amount to make the LC
details are too sketchy, hence all we can make are assumptions

 

[idune]

Sir these are private deals,

Who are you kidding here? Indian govt signed LBA and did not fulfill its obligation 40 years in the making. India govt used Bangladesh territory for food and equipment transit and then used force to say it was free.

As I have point out - fraud is ingrained in indian companies and in indian govt. India and indian companies has ZERO credibility.

If you want make fool out of yourself out of blind patriotism, by all means continue.

 

[Zabaniyah]

I am still uncertain if the said transaction actually happened with LC,
The article isnt clear about
firstly Letter of Credit
Conditions
thirdly the importing company isnt doing well, but if there was an LC, then the bank must have got the required amount to make the LC
details are too sketchy, hence all we can make are assumptions

I edited my post just to get straight to the point.

But that's all that is needed to be heard.

 

[Mr.S.Singh]

Who are you kidding here? Indian govt signed LBA and did not fulfill its obligation 40 years in the making. India govt used Bangladesh territory for food and equipment transit and then used force to say it was free.

talk about business, what does LBA have to do with default of payment due to lack of security ?

As I have point out - fraud is ingrained in indian companies and in indian govt. India and indian companies has ZERO credibility.

If that give you a chest thumping chance go ahead, India does business internationally, your zero credibility stances are low shout

If you want make fool out of yourself out of blind patriotism, by all means continue.

I see u the one with blind hatred

 

[idune]

talk about business, what does LBA have to do with default of payment due to lack of security ?

Why are you running away for fact with tail btw legs. While indian company non payment shows there is no credibility of indian companies and not trust worthy. LBA show indian govt representing indian people has NO credibility and not trust worthy.

India does business internationally, your zero credibility stances are low shout

Generic Lipitor lots recalled due to glass particles; Ranbaxy yanks 40 lots of the cholesterol drug - NY Daily News

FDA bans imports from Sun Pharma plant in India crackdown| Reuters

FDA bans imports from Sun Pharma plant in India crackdown| Reuters

World's cheapest car an 'environmental disaster' for India - ABC News (Australian Broadcasting Corporation)


http://www.business-standard.com/article/companies/indian-cars-fail-european-crash-test-114013101058_1.html

I see u the one with blind hatred

Its typical when indians lie and deception get exposed, they try to hide behind "hatred" defense and play victim. That is lame. Fact is India is the perpetrator of fraud and crime.

 

[Mr.S.Singh]

Why are you running away for fact with tail btw legs. While indian company non payment shows there is no credibility of indian companies and not trust worthy. LBA show indian govt representing indian people has NO credibility and not trust worthy.

sweetheart, you showed one article i can google a thousand against bangladeshi industry, fact is India does business globally, your people did business with a broke company, its utter stupidity on their behalf to do so

LBA, i am not aware of the details, maybe someone who specializes in bangladeshi dealing can help, not my scope

Generic Lipitor lots recalled due to glass particles; Ranbaxy yanks 40 lots of the cholesterol drug - NY Daily News

FDA bans imports from Sun Pharma plant in India crackdown| Reuters

FDA bans imports from Sun Pharma plant in India crackdown| Reuters

http://www.reuters.com/article/2014/03/13/us-sun-pharma-india-fda-idUSBREA2C09S20140313

http://www.nj.com/education/2014/07/rutgers_cutting_ties_with_manufacturers_refusing_to_improve_sweatshop_conditions_in_bangladesh.html

http://www.huffingtonpost.com/2013/05/19/bangladesh-factory-wrangler-shirts-walmart_n_3303631.html

Tanvir Mahmud Arrested In Bangladesh - Business Insider

BASIC Bank ‘laundered money’ too -
bdnews24.com

http://www.ulab.edu.bd/CES/documents/Hallmark_Sonali_Jan_13(sm).pdf

Look at these letter of credit scams in bangladesh,

World's cheapest car an 'environmental disaster' for India - ABC News (Australian Broadcasting Corporation)

http://www.abc.net.au/news/2008-01-11/worlds-cheapest-car-an-environmental-disaster-for/1009386
says a country which uses V8 petrol engines in their suv's

http://www.business-standard.com/article/companies/indian-cars-fail-european-crash-test-114013101058_1.html

http://www.reuters.com/article/2014/03/13/us-sun-pharma-india-fda-idUSBREA2C09S20140313

They pass Indian safety test sweet heart, better luck next time

Its typical when indians lie and deception get exposed, they try to hide behind "hatred" defense and play victim. That is lame. Fact is India is the perpetrator of fraud and crime.

You are more behaving like cry baby, i seriously hope u get past hatred and see the world black and white !