5 Documents related to Payment | Texhour

Letter of credit is the payment method commonly used in all international trade. A Letter of Credit is an arrangement whereby Bank acting at the request of a customer (Importer / Buyer), undertakes to pay for the goods/services, to a third party (Exporter / Beneficiary) by a given date, on documents being presented in compliance with the conditions laid down. It is also known as Documentary Credits.

5 Documents related to Payment  | Texhour
Documents related to Payment

 

Documents related to payment:

  1. Letter of credit

  2. Bill of exchange

  3. Trust receipt

  4. Letter of hypothecation

  5. Bank certificate of payment

 

1. Letter of credit:

Letter of credit is the payment method commonly used in all international trade. A Letter of Credit is an arrangement whereby Bank acting at the request of a customer (Importer / Buyer), undertakes to pay for the goods/services, to a third party (Exporter / Beneficiary) by a given date, on documents being presented in compliance with the conditions laid down. It is also known as Documentary Credits. Read more.......

 

2. Bill of Exchange:

The Bills of Exchange Act 1914 in Mauritius, defines a bill of exchange as – “an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person, or to bearer.” Read more.......

 

3. Trust receipt:

If the buyer fails or unable to pay for the goods arrived, the buyer’s bank may make the goods available to the buyer by making an agreement after the buyer deal or sign with the trust receipt. By this agreement, the buyer is allowed to sell the goods and the buyer acts as an agent for the bank. The buyer didn’t own the ownership of the goods until the full payment is done to the bank.

 

4. Letter of hypothecation:

If the importer (buyer) fails or refuses to pay for the shipped goods, the exporter may submit the document (letter of hypothecation) to the bank that the exporter gives full power to sell the goods and get paid from the bank.

 

5. Bank certification of payment:

This is issued by the negotiating bank of the exporter, proves that all bill covering the shipment has been negotiation and export procedures are completed by the exporter. The payment is received in accordance with exchange control regulations in the approved manner.