Procedure for Opening a L/C for Imports

[A380]

What is the procedure for opening L/C. What is the complete procedure for imports and what are relevant documents involved.

[Abdur.Rehman]

U should visit a bank...
Its there business and they will be more than happy to tell you everything regarding that...

[smraza]

Get L/c opening form, fill it out, attach
1.BBFS (Borrower's basic fact sheet),
2.latest audited fin. statement.
3.pro forma invoice of the item to be imported.

bank will ask you for the security, if no security is availalbe then LC will be opened against 100% margin. i.e. 100% amount to be paid to the bank before the establisment of lc.

TC.

[hanifasif]

Well process here in Saudi Arabia is extremely simple and straight forward.

Only you need to fill in the L/C form (No attachment needed) and bank will deduct only 5% to 8% L/C margin depending on type of import. Opening L/C is no big deal the real problem starts after that. There are custom clearance issue, ( your clearing agent would do this) partial shipments, some times material received is less physically and more on packing lists, insurance claims on damaged materials, exchange rate variations and so on and so forth.

L/Cs are regulated by ICC (International Chamber of Commerce) Publication No. 500. What surprises me is that why in entire course of CA/ACCA there is no topic on L/Cs. It’s a major area of which professional accountants must be aware of. ICC – 500 has made it quite standardized.

You know, I literally thrashed my interviewer on every question he asked me and when he asked me about L/Cs I felt like sinking in the seat.