Trade Finance Facilities

Introduction

Banks play important role in facilitating and financing international trade transactions thereby leading to the growth of overall economy. So are the exporters and importers who are the players in international trade. The much needed working capital and trade financing facilities to run the day-to-day business either for local purchases and sales, or for imports and exports of a company, depends very much on the company’s availability of suitable trade finance products which are offered by banks.

Today banks can provide various trade finance facilities to help companies in their trading activities by giving various types of advances to importers (when importers are faced with tight cash position) and exporters (pending receipt of proceeds from the importers). The trade finance facilities offered by banks are Letter of Credit, Trust Receipts, Bankers Acceptance, Export Credit Refinancing (pre/post shipment), Foreign Bills of Exchange Purchased/Discounted, Shipping Guarantee, Bank Guarantee, Forex etc. Explanation on each type of facility will be given in order to suit the requirement of a company. As such the role of a bank is complementary to the business growth of a company, locally as well as internationally.

How Will You Benefit

Upon completion of this programme, the participants will be able to :

• To identify the various types of trade finance facilities from the bank.
• To identify the common discrepancies in export/shipping documents and the alternatives to the discrepant documents.
• To know the operating procedures of various banking facilities for importers and exporters (as stated in the outline).
• To make a choice as to the suitability of the trade finance facilities to finance the trade.
• To understand the financing of a particular trade which are well-controlled by banks.
• To identify and mitigate the risk and fraud in international trade, its causes and preventive measures.

Audience

This program is suitable for Financial Controllers, Account Executives, Finance Executives, personnels involved in importing, manufacturing, exporting, shipping, freight forwarding, and trading concerns.

Methodology

The programmes are conducted through interactive classroom lectures on key concepts, demonstration of procedures through visual aids, laptop & LCD projector, sample or real Letters of Credit and other shipping documents, various exercises given to participants to further understand the flow of Letter of Credit and the shipping documents, resolving problematic Letter of Credit, addressing discrepant documents and non-compliance to Letter of Credit, and exercises on other trade finance products.

Module

• NAMING THE VARIOUS TRADE FINANCE FACILITIES OF THE BANK
• VARIOUS TYPES OF LETTERS OF CREDIT
• TRADE FACILITIES FOR IMPORTERS: TRUST RECEIPT (TR)
• TRADE FACILITY FOR IMPORTERS & EXPORTERS: BANKERS ACCEPTANCE (BA)
• TRADE FACILITY FOR EXPORTERS: EXPORT CREDIT REFINANCING (PRE/POST SHIPMENT) (ECR PRE/POST)
• TRADE FACILITY FOR EXPORTERS: (FBEP)/(FBED)
• TRADE FACILITY FOR EXPORTERS: DOCUMENTARY BILLS FOR COLLECTION (DBC)
• TRADE FACILITY FOR IMPORTERS: SHIPPING GUARANTEE (SG)
• TRADE FACILITY FOR IMPORTERS AND EXPORTERS: BANK GUARANTEE (BG)
• TRADE FACILITY FOR EXPORTERS: PACKING LOAN (PL)
• TRADE FACILITY FOR IMPORTERS AND EXPORTERS: FOREIGN EXCHANGE (FX)
• FRAUD IN INTERNATIONAL TRADE