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PSB loans in 59 minutes

Business loan in 59 minutes! Doesn’t it sound like a Maggie ad? It did to me. Before we write it off as another tall claim by our PM, with elections round the corner, thought we should do a concrete study on how real or reliable this scheme is for MSME’s of this country.  Well, I would call this a true blessing for businesses if it’s implemented immaculately, sanction to disbursal. What we understand for now is you get an in principle approval in 59 minutes which confirms the amount you are eligible the bank that’s willing to lend etc. However the time taken for disbursal post approval hasn’t been specified. Lets understand more on who is eligible for this loan and how to apply? Who Can Apply: Any business that’s filing GST, IT compliant and has six months bank statement can apply for this loan. What’s the loan amount: Minimum of One lakh INR to maximum of One Crore. What’s the ROI: Starts @ 8% & varies based on multiple factors. What’s the disbursal TAT:  In principal approval in 59 minutes, disbursal TAT is 7-8 days. Does the In-Principal Approval guarantee Loan Sanction/Disbursal: No. Final/Sanction disbursal is sole discretion of the lender. Lender would conduct due diligence on data, information provided on the platform. Is the loan Amount disbursed as CC/OD or Term Loan: This scheme is linked to CGTSME. Its bank’s discretion to lend in the form of OD facility or Term loan. Is collateral mandatory: This loan is offered without any collateral. Step by step process to apply: Website: Please visit www.psbloansin59minutes.com.  Sign up and you get an OTP to the registered number. Submit the OTP to proceed. Answer the simple questions on GST/ IT compliance and proceed.   Answer the simple questions on GST/ IT compliance and proceed. For Existing Business: Details/Documents you need to keep handy: GST no: or GSTIN, User ID & Password Income Tax E filing Password/ Date of  ncorporation (or) DOB or ITR for latest 3 years in XML format.    ​ Latest 6 months bank statements (In case of multiple banks, pls upload the statements where the maximum transactions or business is routed.)   Owners Details   Purpose of loan: Provide the purpose of loan Bank/Lender: Based on eligibility you have list of banks to choose from as shown below. Fee:  1000 plus taxes to be paid to download in the In-sanction approval letter.   You may also visit the below YouTube link for the step by step process:  
 PSB loans in 59 minutes
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Kranthi

Kranthi Tilak Reddy

Blog Author

Kranthi Tilak Reddy is one of the co founders and COO of White Matter Advisory services P Ltd. He is an Engineering graduate from SRM University and has done his Masters in finance.Being a true go-getter and an optimist to the core he has grown up the ranks in banking industry at an astonishing rate, his last stint being Associate Director, Business Clients -South with Standard Chartered Bank. With over 10 years of association with SME businesses and clients he certainly brings rich vein of expertise to the WMA table but more importantly his alluring passion towards great and customer service” the foundation on which he asserts WMA has been built.

PSB loans in 59 minutes

Business loan in 59 minutes! Doesn’t it sound like a Maggie ad? It did to me. Before we write it off as another tall claim by our PM, with elections round the corner, thought we should do a concrete study on how real or reliable this scheme is for MSME’s of this country.  Well, I would call this a true blessing for businesses if it’s implemented immaculately, sanction to disbursal. What we understand for now is you get an in principle approval in 59 minutes which confirms the amount you are eligible the bank that’s willing to lend etc. However the time taken for disbursal post approval hasn’t been specified. Lets understand more on who is eligible for this loan and how to apply? Who Can Apply: Any business that’s filing GST, IT compliant and has six months bank statement can apply for this loan. What’s the loan amount: Minimum of One lakh INR to maximum of One Crore. What’s the ROI: Starts @ 8% & varies based on multiple factors. What’s the disbursal TAT:  In principal approval in 59 minutes, disbursal TAT is 7-8 days. Does the In-Principal Approval guarantee Loan Sanction/Disbursal: No. Final/Sanction disbursal is sole discretion of the lender. Lender would conduct due diligence on data, information provided on the platform. Is the loan Amount disbursed as CC/OD or Term Loan: This scheme is linked to CGTSME. Its bank’s discretion to lend in the form of OD facility or Term loan. Is collateral mandatory: This loan is offered without any collateral. Step by step process to apply: Website: Please visit www.psbloansin59minutes.com.  Sign up and you get an OTP to the registered number. Submit the OTP to proceed. Answer the simple questions on GST/ IT compliance and proceed.   Answer the simple questions on GST/ IT compliance and proceed. For Existing Business: Details/Documents you need to keep handy: GST no: or GSTIN, User ID & Password Income Tax E filing Password/ Date of  ncorporation (or) DOB or ITR for latest 3 years in XML format.    ​ Latest 6 months bank statements (In case of multiple banks, pls upload the statements where the maximum transactions or business is routed.)   Owners Details   Purpose of loan: Provide the purpose of loan Bank/Lender: Based on eligibility you have list of banks to choose from as shown below. Fee:  1000 plus taxes to be paid to download in the In-sanction approval letter.   You may also visit the below YouTube link for the step by step process:  
Rated /5 based on 11 customer reviews
 PSB loans in 59 minutes

PSB loans in 59 minutes

Kranthi Tilak Reddy
Business loan in 59 minutes! Doesn’t it sound like a Maggie ad? It did to me. Before we write it off as another tall claim by our PM, with elections round the corner, thought we should do a conc...
Continue reading

What are the current problems being faced by organizations in raising capital?

Raising capital refers to establishing capital from investors or venture capital sources by any firm. When any company wants to be more extensive, it can raise additional capital. Usually, extremely small or small company capitals come from three sources- friends and family, Business Angels and venture capitalists. Medium enterprises most of the times go with debt financing, equity financing and sometimes from the government too. There are many schemes provided by the government for such enterprises which lead to improvising in the economy of India. The methods and processes involved in raising capital for long term and medium term are listed below-       A. Issue of shares Equity shares Preference shares     B. Issues of debentures     C. Loan from Financial Institutions     D. Loans from commercial banks     E. Public deposits     F. Reinvestment of profits The methods and processes involved in raising capital for short term are as follows- Trade credit Factoring Discounting bills of exchange Bank overdraft and cash Above are the most common sources of startup capital for businesses. Every entrepreneur should know the game before being willing to invest their own money and proceed towards implementing business plan. “It’s often said, raising money is not actually a success, it’s not actually a milestone for a company and I think that’s true” - Marc Andreessen We shall now proceed to the discussion of some of the major concerns faced by organizations in raising capital- The current problems being faced by organizations in raising capital   One of the biggest challenges of funding is accepting rejection. Usually, the startup entrepreneurs do not end up with a good response. Investors are really not interested in startup or small-scale industries as they see very less potential. The main trouble that small businesses face while approaching for funds is the problem of uncertainty. Usually, small businesses do not have any past record that investors or lenders can analyse to decide whether or not to provide the small business with the required fund needed for expansion. Usually, small and medium firms have to pay a higher rate of interest in banks as compared to big and established firms. Banks and financial institutions ask for personal guarantees also. The stock marketers tend to lay or attach little value to it because they may not have confidence in small business offers. This will make the firm to issue more number of shares which dilute the firm’s earning. It becomes difficult for small businesses to find investors who are willing to invest. Investors are more likely to invest in bigger and more attractive firms. Strategies to resolve the current issues Grants by the government should be given to individuals for a specific project or purpose. There are some conditions which are to be followed for grants to be obtained. Funds from informal network of friends and family members is often ignored as a source of fund for small and medium-sized companies if well harnessed . Venture capitalists provide money to start-ups in the expectation of abnormally high return.
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What are the current problems being faced by organizations in raising capital?

What are the current problems being faced by organizations in raising capital?

Kranthi Tilak Reddy
Raising capital refers to establishing capital from investors or venture capital sources by any firm. When any company wants to be more extensive, it can raise additional capital. Usually, extremely s...
Continue reading

Is “Gift Gujarat” Going To Be India’s New Best Friend?

To grease the wheels in the global economic marathon, strategies such as GIFT Gujarat has been brought into existence. It is said to be developing into a platform to showcase India’s competitiveness at a global altitude transforming it into a financial zone. GIFT City is the first IFSC (International Financial Services Centre) of its kind in India. What is GIFT Gujarat? `GIFT (Gujarat International Finance Tec-City) is a government plan aiming to provide a high-quality infrastructure to attain a fin-tec developed region, for which it has acquired a land of 359 hectares. This particular land is situated between Ahmedabad and Gandhinagar located in Gujarat. The government of Gujarat is working towards the hitch with an estimated cost of 1300 billion INR for the entire project. The area under construction includes plans of incorporating world-class infrastructure like telecoms, broadband, roads, buildings, district cooling etc. The Government of Gujarat has partnered with Infrastructure Leasing (IL) and Financial Services (FS) as a 50-50 joint venture with Ajay Pandey as the MD and CEO, to develop the central business district as a India’s first Global Financial Hub, giving effect to the financial and technological firms to relocate their operations in Gujarat. “GIFT GUJARAT” A MASTER PLAN: The plan was laid out by our Prime minister Narendra Modi, to build best infrastructures to attract FDI inflows and motivate people to set up offices. The proposed plan is said to boost the economy with employment opportunities on a large scale aiming to generate one million jobs by 2025 in the financial as well as technology sectors. An IFSC is favoured with certain tax benefits and an institution for rapid resolution of disputes. The City is in line and deals with the Reserve Bank of India, Insurance Regulatory and Development Authority (IRDA), Securities Exchange Board Of India (SEBI) and a few other financial institutions. SEBI is envisaged to strengthen commodity derivatives tradings limited to non-agricultural commodities and predominantly entice additional foreign portfolio investments. SEBI has stated to settle cash in foreign currency only on determined price on the overseas exchanges.Currency, commodities and equity segments conforming with the SEBI rules are anticipated to get listed on the new exchanges paving way for the introduction of new products. Is It a Real Gift? Gift City Gujarat progress : An IFSC is favoured with certain tax benefits where infrastructure is said to be deficient or exorbitant. GIFT has been successful in creating more than 8,000 jobs and is anticipated to leap +50% yearly aiming at one million jobs including 500,000 direct employment. Bank of Baroda with more than 1500 employees is the largest employer in this business region. It is expected to make use of 62 million square feet of space for its operational purposes. The smart city is intended to be a centre for setting prices on trading instruments like currencies, commodities etc globally. There are about 11 important domestic banks like HDFC, SBI, KOTAK MAHINDRA etc that have already started operations in this region. Their financial transactions have estimated to crossed 8 billion dollars. The GFCI report lists top 15 centers which are predicted to be remarkable in the upcoming years. GIFT has positioned in the tenth place in the latest edition of Emerging Global Financial Centres (GFCI). The business area is planned to be composed of special economic zone (SEZ), grand hotels, integrated townships, sophisticated educational zone, technology parks, stock exchanges and other advanced institutions. Two 29-floor commercial towers are already constructed leading the way for further upgrowth. There are about 100 capital market players and eight insurance companies who have commenced their base in GIFT. On the grounds of reduced taxes for SEZ’s, overseas currency loans are easily accessible to the abroad Indian companies and other foreign entities. The IRDAI has issued regulations permitting to set up offices in IFSC GIFT for Indian as well as offshore insurers which were restricted earlier, with a bonus of exemption from GST for export of services. The trading will be done for 16 hours and is made adjustable depending on the market demand, covering Singapore market and closing with London. DRAWBACKS OF GIFT: After the implementations are being made, education has not been streamlined and is getting expensive especially for engineering and medical fields. The land is just 12 kms away from Ahmedabad airport, which imposes a few restrictions on the height of the buildings and structures around this area to keep the flight’s path clear. There has also been deliberation on structuring and renewing design of development to fill in the gap of new requirements and the plans. Short-term capital gains taxes on transactions are to be removed to compete with international exchanges operating in IFSCs like Singapore and Dubai. This is because firms without a physical setup in the city making investments in securities, have to pay capital gain taxes. Although there were several discussions on starting an IFSC in Mumbai, currently it is a formidable thought for India. China is the only nation with two international finance centres which were developed with a span of eight years. In a short duration of two years, it has caught the eye of the investors and set to unwind the potential of the country. If the plan is executed in an effective manner and is uninterrupted, it could be cast as a base for syndication of loans for foreign currency and other global activities.
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Is “Gift Gujarat” Going To Be India’s New Best Friend?

Is “Gift Gujarat” Going To Be India’s New Best Friend?

Kranthi Tilak Reddy
To grease the wheels in the global economic marathon, strategies such as GIFT Gujarat has been brought into existence. It is said to be developing into a platform to showcase India’s competitive...
Continue reading

An Overview of Foreign Direct Investments

We all are aware how indispensable Foreign Direct Investments (FDI) are to boost economic growth on a large scale. Moreover, the foreign capital flowing into any country is also one of the powerful sources for economic development of India as this money is used to establish tangible assets in company. Meaning of FDI: Foreign direct investment is a broad term where an investor from a different country invests money in a business of another country to take economic advantage of expansion, wages, cheap skill set etc. This can be done either by setting up a business with an infrastructure for operations or by the way of purchasing business assets in other countries by the Multinational Corporations (MNCs). FDI example: SAIC Motor Corporation is planning to enter India’s automobile market and begin operations in 2019 by setting up a fully-owned car manufacturing facility in India. Types of Foreign Direct investments: Horizontal FDI is where entities carrying on similar activities combine. Vertical FDI is where companies performing different types and stages of manufacturing combine to produce the final product. Conglomerate FDI is the most different one where investments are made in unrelated business, it is challenging as it involves working in a new industry and fresh markets. What are the advantages of FDI? There are a plethora of advantages that a growing economy like India can derive from FDIs. Few of the predominant benefits of FDI are listed here. Source of capital: They act as a source of external capital to the Indian companies, especially growing startups which in turn is beneficial in deriving more revenue. Employment opportunities: Once the infrastructure is set up, the business requires local labour, equipment etc leading to the creation of new jobs. Tax generation: Activities in the factory are exposed to taxes which generate income to the government. The return can be used to build roads, educational institutions and for other domestic economic activities. Globally exposed: Indian domestic companies are accessed to foreign markets and are globally recognised. Technology transfer: Best in practices with economic concepts and technological know-how of the host country as it involves establishing and functioning of a firm. What are the disadvantages of FDI? Like any other investment, FDI also has its own disadvantages. Some of them are discussed below: Profits of small domestic business and supply chains might get affected adversely. Huge MNCs try to monopolise and take over highly profitable companies. Might slightly affect the exchange rates of the currency. Extensive use of precious resources leading to decreased use for domestic purposes. What are Greenfield and Brownfield Investments in FDI? MNCs investing in abroad companies are often referred to as Greenfield investments and when these entities are involved in other acquisitions and merge with foreign firms, they are also known as Brownfield investments. Both of these investments are helpful in driving financial and economic development indirectly. Greenfield investments are said to have a relatively higher impact on a country’s economy as it aids in capital accumulation. Whereas, Brownfield investments positively contribute to the transfer of knowledge and influence technology.   
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An Overview of Foreign Direct Investments

An Overview of Foreign Direct Investments

Kranthi Tilak Reddy
We all are aware how indispensable Foreign Direct Investments (FDI) are to boost economic growth on a large scale. Moreover, the foreign capital flowing into any country is also one of the powerful so...
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Overseas Direct Investments

Introduction: Overseas market gives opportunities to Indian entities to expand and diversify their business abroad by making full utilization of the capacity through an “overseas direct investment” . To put it in simple words, it is an investment done outside India. In recent times, India is making a positive approach towards this pre-eminent step that has seized the global marketplace. Meaning of Overseas Direct Investment: When an organisation invests money abroad by starting a business or either capitalising them, it is known as “Overseas Direct Investments”. This business strategy creates branding for an entity as well as helps the Indian entrepreneurs to get global exposure. Overseas Direct Investments can include making investments in Joint Ventures or a Wholly Owned Subsidiary abroad, purchase of shares or private placement in foreign entities etc, but portfolio investments are not included here. Eg: The third largest software service company in India, Wipro will be acquiring US-based cloud services firm Appirio by spending US$ 500 million. Governing body: The Reserve Bank of India is the governing body of the Overseas Direct Investment activities. They draw up the guidelines and look if such investments are in compliance with them. Through the Master Circulars from RBI along with FEMA Act.co the cross-border transactions are regulated and are amended from time to time. http://www.rbi.org.in/scripts/Fema.aspx.   The two different ways an Indian party can involve in ODI  are Automatic route and Approval route: Automatic route: If the Indian parties are exposed to Automatic route while involving in overseas direct investments, they  do not necessarily require any prior approval from the Reserve Bank of India. An Indian party making overseas direct investments whether in a joint venture (JV) or a wholly owned subsidiary (WOS)  needs to approach an Authorised Dealer Category-1 bank with application Form ODI and with other documents for remittances in terms of A.P. (DIR Series) Circular No.62 dated April 13, 2016. After a particular Unique Identification Number is provided instantaneously, subsequent investments can be made in the same JV and WOS. Approval route: Under the Approval route, if the Indian party proposal does not cover the conditions under the “automatic route”, then it requires a prior approval from the Reserve Bank of India. This requires an Authorized Dealer Category-1 bank to submit a specific application in Form ODI along with other prescribed documents. Currency restrictions: To make investments in Pakistan, it is permissible only under the approval route. Any investments in Bhutan are permitted to be made in Indian rupees and in convertible currencies, but in Nepal, it can be done only in Indian Rupees. Advantages of ODI: This development has inclined benefits towards drawing better technological know-how to Indian companies. It provides a platform to expand business opportunities across the globe. This facility allows the Indian companies to get direct access to more demanding and extensive markets. Domestic companies can achieve a widespread customer base in the global arena. Recent developments in ODI: Considering the above advantages, the Indian government is rigorously making efforts to combine the domestic economy with the global economy. In accordance with the RBI reports, Indian overseas direct investments in equity, loan and guaranteed issue in the month of Aug 2017 rose up to US$ 1.33 billion as against US$ 1.76 billion in July 2017.  Lately, the UK reported that India stood at the third place as a source of foreign investments for them.   From April 1, 2017, to June 30, 2017, the highest Overseas Direct Investments by India was made in the United States of America, Singapore and Mauritius with 1,341 USD millions (34%), 657 USD millions (17%) and 554 USD millions (14%) respectively. Also, refer RBI master circulars for more information: https://www.rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=8100 For other information get in touch with www.savedesk.co
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Overseas Direct Investments

Overseas Direct Investments

Kranthi Tilak Reddy
Introduction: Overseas market gives opportunities to Indian entities to expand and diversify their business abroad by making full utilization of the capacity through an “overseas direct inves...
Continue reading

Significance Of Libor (London Interbank Offered Rate)

History of Libor: Rooted from the early 1980s, LIBOR has an active part in the modern financial markets. In 1986, Libor was officially launched by the “British Bankers”, with top three currencies - dollar, yen and the pound sterling.  Before the takeover by IBA (ICE Benchmark Administration) it was known as BBA libor until Feb 1, 2014. SIGNIFICANCE OF LIBOR: The libor rates have a vast spread significance and as it is not just limited to London or Europe. They have more than sixty nations as volunteered members possessing an international scope. This is primarily due to the lowest borrowing rates presented  among all the other financial institutions. The FOREX market is probably unthinkable without libor and its implications in global currency trade. Also familiar as ICE libor or benchmark rate offered by the London interbank, it is predominantly used in Forex markets to serve the purpose of calculating interest rates on various loans across the world. WHAT IS LIBOR? “LIBOR” or Intercontinental Exchange London Inter bank Offered Rate is a reference benchmark rate charged by the banks for short-term debt instruments which includes government and corporate bonds, derivatives such as currency and interest swaps etc.The rates offered are considered as the base price by banks to calculate interest rates. Libor is used as base price+marginal interest cost that help companies to hedge interest rates exposures. HOW DOES LIBOR FUNCTION? It is structured to work in a way where a group of major banks is asked to quote the rate at which they could borrow funds from other banks before 11:00 AM each morning (Greenwich Mean Time). About 35 libor rates are posted each business day and the lowest interest rates are compiled for loans with 7 different maturities for 5 major currencies. Libor can range from overnight to twelve months, but the most quoted is the 3 month USD rate. Basically, libor is calculated on a method called “trimmed arithmetic mean” wherein the extreme values are included.This can be expressed as “LIBOR+X bps”, wherein bps stands for ‘basis point’ and ‘X’ is the premium charged over and above the libor rate by the lender to the borrower. The publication of benchmark such as libor is beneficial for the bank customers to judge whether a loan rate is competitive in the market. Libor is not prefixed but is based on a questionnaire where selective banks estimate the borrowing rates. LIBOR decides rates on five major currencies  1)CHF(Swiss Franc)   2)EUR(Euro)   3)GBP(Pound Sterling)   4)JPY (Japanese Yen)   5)USD(US Dollar). Most of the credit agencies, banks and other financial institutions all over the world look up to libor rates to set up their own interest rates. Presently, there are contracts worth more than trillions of dollars which are spread across different maturities to benchmark libor. Other rates are fixed on top of libor. Though it has encountered a number of controversies, its daily borrowing rates continue to be at the top to calculate base for interest rates.
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Significance Of Libor (London Interbank Offered Rate)

Significance Of Libor (London Interbank Offered Rate)

Kranthi Tilak Reddy
History of Libor: Rooted from the early 1980s, LIBOR has an active part in the modern financial markets. In 1986, Libor was officially launched by the “British Bankers”, with top three ...
Continue reading

Export Credit : Fundamentals, Risks Involved And Ways To Mitigate Them

Companies that uphold exporting have to be skillful with their approach as they embrace huge risks. These companies have to follow the requirements and have to be committed to their export operations. If you are intending to extend your export credit, here is a watch over on how export credit agencies work, risks covered by exporters and ways to mitigate them. EXPORT CREDIT AGENCIES: Export credit agencies (ECA) can be referred as intermediaries mediating between a nation’s government and the exporters. There are about 85 export credit agencies approximately around the world. ECAs comprise of financial institutions supporting international export activities by funding domiciliary companies. These agencies are also known as investment insurance agencies, could be private or quasi-governmental institutions. ECAs promote international trade in the form of crediting insurance and guarantee arrangements or both, often referred as “pure cover” which depends on the directions provided to ECA. Shifting risks by the virtue of premiums from the corporations, they tend to encourage foreign trade by promoting investments in areas where corporations fail. These agencies often involve in a few risks that are sustained by the supporting country’s government. Large risks, other than any normal transactions, will be inspected by a committee of government or authorised officials. ECA adopts three methods to funds- Direct funding- This is the basic structure where the loan is customized for the purchase of goods and services in the arranging country. Financial intermediary- This involves a financial intermediary that lends to the importing entity. Interest rate Equalization- A commercial money monger grants loans less than the market rates. Later, he is secured with the difference amount between the market rate and the commercial rate. Export credit agencies limit their risks by not funding to risky countries. In case of non-compliance with the provisions described in the policy, claims on the losses of uncovered portions may be refused. “By using ECAs, exporters can sell on more liberal terms than cash in advance policies, and  still have a high degree of certainty that they will get paid.” -World’s Export Credit Agencies”,written by- William A. Delphos provides this insight, RISKS INVOLVED IN EXPORT BUSINESS AND WAYS TO MITIGATE THEM: The most common risk of all is the payment risk. This can occur when the customer dodges payments for operational reasons. The best way to secure this risk is by a well-written contract. It cannot be recovered with credit insurance. Even after the beneficiary satisfying the terms and conditions, there can be risks of defaults on payments by the issuing bank.  Hence, the exporter is issued with confirmation of Letter of Credit that assures his payments. Bad debts disturb profitability and can adversely affect the payments in international trade. Therefore, to mitigate this, it is always expected to keep alternatives like confirmation of LC, credit insurance or debt purchase (factoring without recourse of forfeiting). The banks would have formerly advanced the funds in the debt purchase transaction, where it is without recourse. Here, the banks or the financial institutions take the risk of nonpayment. The exporter has to be very sure dealing with creditworthiness of the foreign buyer, predominantly because international business covers large distances and unusual environments. If the creditworthiness is unknown, there are high risks of non-payments or fraud involved. To soften the process, you can aid from a few commercial firms in assisting on credit-checking and secure payment methods such as an irrevocable documentary credit.    In the course of shipment, there can be theft, damage or non-arrival of goods. It is very important for the exporter to understand the transportation and logistic risks in particular the “contract of carriage”.  It is always better to request pre-shipment inspection to secure both importers and exporters interest. There can be chances of rejecting the arrived shipment and non-payment due to poor quality.    The exporter should be aware of the legal formalities of the contract as international laws and regulation change frequently and are enforced differently from the exporter’s country. The exporter’s interest can be  secured by covering all legal and political risks. International business embraces two different currencies, changes in exchange rates has negative impacts on both the factors and one of the factors will derive benefit ultimately. To overcome this,  it is optimum to quote in one’s very own currency and hedge through the purchase of “forward exchange rate” contracts. There can be a few countries with constraints upon their foreign currency reserves while they are advanced towards more open markets. In such cases, there can be non-payment to the exporter due to non-sufficient foreign exchange for payments by the Reserve or Central bank of the importing country. If the banks are not solvent, then they can not meet their financial commitments. In such cases, transactions pertaining to cash against LC and guarantees may not be honored, which can contribute to outstandings. Loss might be faced by the exporter if there are any occurrences of natural disaster or unexpected terrorist actions destroying export market for a company. These are some of the unforeseen risks that exporters should be aware of. In any international contract, it is necessary to ensure that the force majeure clause is included
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Export Credit : Fundamentals, Risks Involved And Ways To Mitigate Them

Export Credit : Fundamentals, Risks Involved And Ways To Mitigate Them

Kranthi Tilak Reddy
Companies that uphold exporting have to be skillful with their approach as they embrace huge risks. These companies have to follow the requirements and have to be committed to their export operations....
Continue reading

India’s Transition Into Digital Trade

In a world of rapid technology adoption, a whole lot has been digitised. Meanwhile, it is also essential to shape the future of digital economy. Being empowered by the new forms of digital commerce is the latest economic imperative. It diminishes barriers and creates growth opportunities. The Fourth Industrial Revolution project deploys public-private alliance to implement digital trade, as the international trade has always relied on paperwork. Even for most of the regulatory activities associated with trade apart from the financial and commercial documents, there has been put significant emphasis on paper-based reporting. The initiative of Digital India has been taken primarily to reduce the dependence on paper for international trade, and to streamline both governance and monitoring of trade transactions. This e-trade initiative covers these key objectives: Electronic filing to customs authorities and airports/seaports, etc of import and export documents by the imports and exporters. Electronic delivery of services provided to exporters, importers and customs agents by the airports, seaports and customs. Electronic payment of charges like custom duties, licence fees etc. The Digital trade policy framework by the Fourth Industrial Revolution project includes: Direct and shape the policies related to digitization of trade and cross-border data that flows nationally, regionally and globally and other e-commerce trade activities. Offering insights, supporting and building capacity for policy-makers to comprehend cross-border data flows and to deal with the swift technological changes in digital trade. Promoting practical solutions and generating global thought leadership to advance inclusive growth and to sustain improvement in digital trade. To model the trajectory of the advanced technologies and discover tangible economic and social impacts by designing and implementing Fourth Industrial Revolution pilot projects. A kickstart was made towards this with e-BRC and ICEGATE, which was expanded to include more trade activities in the EXIM process. For the fact that the export data was made available in the electronic form in DGFT’s, EDI system, but the realisation data was available only in the physical form, the initiative of the primary driver e-BRC was taken. Moreover, the exporters, in order to claim benefits used to submit this physical ‘realisation data’, which was difficult to be integrated into the EDI system as it was prone to errors or causing delays. For any exporter, managing and retaining the BRC documents was definitely a big task because the documents were of great importance and any loss or damage had its own consequences. For the task to be much simpler, the e-BRC launched all the data in electronic form, making it available in the system. Now it has access to be downloaded, printed or even stored in the electronic media, providing coherent integration of realisation data with shipment data, thereby streamlining settlement process and the export benefit reconciliation. ADDITIONAL STEPS: EDPMS- In April 2014, RBI implemented Export Data Processing & Monitoring System (EDPMS) to integrate the data flow between stakeholders in the export process which plugged a major gap in reporting and reduced paperwork. IDPMS- Later on, in Oct 2016, there was a similar system implemented for import transactions named IDPMS Import Data Processing & Monitoring System.​ It worked similar to EDPMS but for imports, there were other implementations and changes made in accordance with FEMA and provided stringent monitoring of import settlements. Imports proofs are available electronically: With all the required shipment data and the exports and imports settlement data made available in the electronic form, it is also essential to make other regulatory documents like Shipping bill make Bill of Entry available online. Subsequently, the Reserve Bank of India has directed the banks not to insist on a hard copy evidence of import documents from Dec 01, 2016 and make settlements of transactions by using the data available in IDPMS to match off remittances with imports, as it has issued directions vide A.P. (DIR Series) Circular No. 27 dated Jan 12, 2017). Therefore, the importers will now have details such as the port code and BoE date to his AD in order along with BoE number (issued by customs at the  time of clearance of goods) to make settlements of an advanced payments or to settle the import with outward remittances. The AD will do the necessary processing by extracting the details of the Bill of Entry from the system. The bank is also burdened with issuing a printed acknowledgement to the importer to keep in conformity with the Circular and provide it as an  evidence or to list any unsettled portion of remittance/import. With all this processing, Bill of Entry, the crucial regulatory document gets digitized to simplify and ease the trouble caused for a lot of importers. Get your Shipping Bills Digitally: It is made clear that the physical Shipping Bill is of no major use now, stated by: Customs Circular of Nov 23, 2016. Now, going fully digital for Shipping Bills and Bill of Entry will systemize document handling and reporting activities to a very large extent. The only exception is provided to the non-EDI ports, this area is left out and focus is required to ensure there are no gaps. Minor issues to be resolved: Presently, there is access to EDPMS and IDPMS platforms provided to multiple stakeholders in the international trade ecosystem, viz., RBI, DGFT, Customs authorities, and Authorised Dealers. But on the other hand, for the exporters & the importers dealing in very large quantities, the biggest stakeholders are not accessible to these systems. It would be helpful to the exporters and importers if access is provided to view the data pertaining to them in these systems. Few cases are found where there is no update available on EDPMS even after the submission of realisation details for export bills to banks by the exporters. Meanwhile, there are no facilities for the exporters to verify independently if all the details are captured correctly by the bankers. This assumes more prominence now, considering that a Shipping Bill that remains unsettled for about two years could be automatically caution-listed. This would definitely end up with the exporters paying the prices for bottlenecks at the AD banks There can be similar situations found for imports as well. An access where the importers and exporters are allowed to download and view data relating to his/her IE code would aid in sorting such issues. This would also pave the way to leverage the benefits of these systems to the possible extent. For exporters especially, this should help them have a consolidated view of all Shipping Bills in their names which provide information with reference to the status (settled/unsettled/partially settled). Importers should also be able to view the BoEs raised by them, other outstanding bills if any, and the advance payments done on bills. If these issues are addressed, there will be significant contributors. Future of digital trade: Laying the foundation of digitally enabled trade is what India is looking forward to. Since the process is much more simplified, there is no need for the importers to undergo the trauma of the physical processes. All the activities can digitally aid to improve the productivity of businesses, and raise levels of innovation and competitiveness which leads to increased opportunities for international trade.
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India’s Transition Into Digital Trade

India’s Transition Into Digital Trade

Kranthi Tilak Reddy
In a world of rapid technology adoption, a whole lot has been digitised. Meanwhile, it is also essential to shape the future of digital economy. Being empowered by the new forms of digital commerce is...
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Manufacturing Exporters Can Claim Their Refunds For The GST Paid

On the GST network portal, the merchant exporters can begin collecting their tax refunds through a new facility that has been activated from November 15th night, GSTN CEO Prakash Kumar has said.An exporter, through this new facility RFD-1A can claim his refunds of GST paid for  buying the goods in the relevant months."GST RFD-1A for refund of input tax credit on export of goods and services and additional amount in cash ledger would go live on GSTN portal tonight," Kumar told.The refund claims can be submitted for July, August, and September and that would be in conformance with GSTR-3B registered  by the exporter.Kumar further added that the newly introduced functionality on the portal facilitates the business GST practitioner (GSTP) to engage or disengage.Previously, for those exporters who had paid Integrated GST (IGST) during the export of goods, GSTN had also launched a utility that aids in processing the refund claims.Central tax officers are loaded with validating applications, as there are around 46,000 people who have enrolled."The list of practitioners would be put up on the GSTN portal and businesses can search for a GSTP in their locality and send request. The practitioner can then decide to accept it or reject," Kumar said.In addition, he explained that after the business has appointed a practitioner, any communications made would be automatically sent to the GSTP as well as the taxpayer.Besides this, to facilitate the registration of non-resident taxable persons engaging in supply of goods or services once in a while without a fixed place in India, GSTN has come up with form REG-09.“All foreign exhibitors participating in fairs like IITF who also want to sell their goods are required to register as non-resident taxpayer”, Kumar said.
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Manufacturing Exporters Can Claim Their Refunds For The GST Paid

Manufacturing Exporters Can Claim Their Refunds For The GST Paid

Kranthi Tilak Reddy
On the GST network portal, the merchant exporters can begin collecting their tax refunds through a new facility that has been activated from November 15th night, GSTN CEO Prakash Kumar has said.An exp...
Continue reading

India-Canada To Emphasize On Free Trade Pact

A recent official statement tips that India and Canada at the annual ministerial dialogue will strive for the swift termination of a Comprehensive Economic Partnership Agreement on goods and services.  For the 4th Annual Ministerial Dialogue (AMD), a high-level delegacy guided by the Francois-Philippe Champagne, Canadian International Trade Minister are visiting India. The Commerce and Industry Minister Suresh Prabhu will be leading the Indian delegation.The release stated that in the present round more focus will be laid on some of the vital commercial drivers to emphasize the bilateral partnership."Efforts would be made to work towards the expeditious conclusion of the Comprehensive Economic Partnership Agreement (CEPA) for a progressive, balanced, and mutually beneficial agreement covering both goods and services," it stated.Down by 1.87% from the last year, India-Canadian merchandise stood at USD 6.13 billion (2016-2017).To boost the bilateral trade and investments, the discussions on the agreement  were launched in Nov 2010.In accordance to the release, the two trade ministers are most likely to discuss problems on finding ways to accelerate the swift conclusion of the CEPA and the Foreign Investment Promotion and Protection Agreement on considering the high potential for bilateral trade."They would also explore options for Indian interests in addressing the Temporary Foreign Workers Programme of Canada, which is affecting the movement of Indian professionals seeking short-term visas, address equivalence by the Canadian Food Inspection Agency for Indian organic product exports and exploring two-way investment opportunities," it said.Currently, more than 3% (i.e, 1.2 million) of the Canadian population comprises Persons of Indian Origin (PIO’s)."Though India's commercial ties with the US have seen an upswing in the last few years, trade and investment relations between India and Canada are yet to realise their full potential," the release said.“Given enormous complementarities, a concerted effort to boost bilateral trade and investment from both sides would provide a fruitful outcome” it added.
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India-Canada To Emphasize On Free Trade Pact

India-Canada To Emphasize On Free Trade Pact

Kranthi Tilak Reddy
A recent official statement tips that India and Canada at the annual ministerial dialogue will strive for the swift termination of a Comprehensive Economic Partnership Agreement on goods and services....
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