what is the 60 days DA LC
Post 2 of 10
Quoting from [parvez]:
what is the 60 days DA LC,is it safe??
Irrevocable at sight letter of credit is the best one for payment terms. At times the buyers open sight L/C with 30,60 and 90days(anyone period) as DA ( documents against acceptance) terms. After accepting the documents for payment in thier Bank ,get the BL for clearing the goods:after the said period they will pay the amount to the Bank. and clear the goods: Take the goods and sell and pay the money.
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17 Nov 2006 22:56
Post 3 of 10
Replying to [parvez]: You will get payment after 60 + days, after they buyer accepts the documents.
23 Nov 2006 04:41
Post 4 of 10
Replying to [parvez]: L/C at sight is the only one " SECURE MODE oF PAYMENT". Other cases are depend upon undersatnding between buyer and seller. If your buyer is Geniune he will pay. Otherwise you business will rouin out. These L/Cs are called CREDIT L/C and it is not advisable to do supply if your buyer is New one. And whatever it may be there is no strong slab to supply anyone to at 60 days after payment. ![[em4]](http://img.alibaba.com/images/eng/style/icon/emoticons_sad.gif)
23 Nov 2006 07:29
Post 5 of 10
Replying to [curdrice]:
Replying to [parvez]:
Dear Sirs,
I am writing a brief note on your question and trying to put a very simple reply of your question, so that even a layman can understand it. If needed the questions can be replied in more details.
Q. What is 60 days DA?
60 Days DA means the exporter has agreed to sell goods on 60 days credit. D A stands for Documents against Acceptance.
On this terms the exporter sends ( ship) the goods on agreed Incoterms i.e FOB, C & F or CIF etc and sends the shipping documents to importer's Bank through his Bank with a Bill of exchange on which the importer agreed to make the payment after 60 days from the date of shipment. Since, the importer can take the delivery of goods and can even sell the goods, since he holds the entitlement of goods the exporter only depends on the good intensions of the importer and can not do much except to wait and ask him to send the payment in time.
Failing which he can go to a local court ( in importers country) and can file a legal suit against him. Normally such suits realizes the money from the importer with cost.
In general the credit terms should be offered to any importer after receiving a Bank report about his credibility. With good buyers getting money is not a problem but with importers with fraud motivations, this can lead to serious financial problem for the exporter of any country.
In India there is a system of ECGC financial risk coverage, which gives financial guarantee to exporters when the exporters faces any such problem of non payment, provided the non payment is not due to quality disputes.
Q. 60 DAYS DA LC?
When 60 days credit period is backed by a Letter of Credit, it payments is made after 60 days from date of shipment and this deal being through a Letter of Credit eliminates the credit risk otherwise found in 60 days pure credit terms.
CLARIFICATION ON WHAT A LETTER OF CREDIT IS?
LC or Letter of Credit
Letter of Credit is a letter issued by the importers bank in favour of the exporter by which the Bank gives a guarantee of payment provided the exporter has fulfilled all the terms and conditions as mentioned in the letter of credit relating to ordered items, quantity, value, date of shipment (by sea, air, Rail or Multi Model Transport etc) , mode of shipment date of negotiations etc.etc
The Letter of credit can be broadly put in two main categories
Irrevocable letter of Credit and
Revocable letter of Credit.
An irrevocable letter of Credit can not be changed once issued by the issuing bank with the consent of both exporter and importer but a Revocable Letter of Credit can be changed without even informing the exporter and is normally in practice with two sister concern of the same organisation.
The are other type of LC like At sight, Green clause or Red callused LC etc
In spite of few problems of its opening formalities it is one of the best method of buying and selling between two unknown buyers and sellers all over the world.
Ravindra K Kapoor
INTERNATIONAL SERVICES
To prevent spam, do not enter your contact information - Moderator
Replying to [parvez]:
Dear Sirs,
I am writing a brief note on your question and trying to put a very simple reply of your question, so that even a layman can understand it. If needed the questions can be replied in more details.
Q. What is 60 days DA?
60 Days DA means the exporter has agreed to sell goods on 60 days credit. D A stands for Documents against Acceptance.
On this terms the exporter sends ( ship) the goods on agreed Incoterms i.e FOB, C & F or CIF etc and sends the shipping documents to importer's Bank through his Bank with a Bill of exchange on which the importer agreed to make the payment after 60 days from the date of shipment. Since, the importer can take the delivery of goods and can even sell the goods, since he holds the entitlement of goods the exporter only depends on the good intensions of the importer and can not do much except to wait and ask him to send the payment in time.
Failing which he can go to a local court ( in importers country) and can file a legal suit against him. Normally such suits realizes the money from the importer with cost.
In general the credit terms should be offered to any importer after receiving a Bank report about his credibility. With good buyers getting money is not a problem but with importers with fraud motivations, this can lead to serious financial problem for the exporter of any country.
In India there is a system of ECGC financial risk coverage, which gives financial guarantee to exporters when the exporters faces any such problem of non payment, provided the non payment is not due to quality disputes.
Q. 60 DAYS DA LC?
When 60 days credit period is backed by a Letter of Credit, it payments is made after 60 days from date of shipment and this deal being through a Letter of Credit eliminates the credit risk otherwise found in 60 days pure credit terms.
CLARIFICATION ON WHAT A LETTER OF CREDIT IS?
LC or Letter of Credit
Letter of Credit is a letter issued by the importers bank in favour of the exporter by which the Bank gives a guarantee of payment provided the exporter has fulfilled all the terms and conditions as mentioned in the letter of credit relating to ordered items, quantity, value, date of shipment (by sea, air, Rail or Multi Model Transport etc) , mode of shipment date of negotiations etc.etc
The Letter of credit can be broadly put in two main categories
Irrevocable letter of Credit and
Revocable letter of Credit.
An irrevocable letter of Credit can not be changed once issued by the issuing bank with the consent of both exporter and importer but a Revocable Letter of Credit can be changed without even informing the exporter and is normally in practice with two sister concern of the same organisation.
The are other type of LC like At sight, Green clause or Red callused LC etc
In spite of few problems of its opening formalities it is one of the best method of buying and selling between two unknown buyers and sellers all over the world.
Ravindra K Kapoor
INTERNATIONAL SERVICES
To prevent spam, do not enter your contact information - Moderator
23 Nov 2006 08:58
Post 6 of 10
Replying to [parvez]:Irrevocable at sight letter of credit is the best one for payment terms. At times the buyers open sight L/C with 30,60 and 90days(anyone period) as DA ( documents against acceptance) terms. After accepting the documents for payment in thier Bank ,get the BL for clearing the goods:after the said period they will pay the amount to the Bank. and clear the goods: Take the goods and sell and pay the money.
05 Dec 2006 05:14
Post 7 of 10
Quoting from [abnooos]:
Replying to [parvez]:Irrevocable at sight letter of credit is the best one for payment terms. At times the buyers open sight L/C with 30,60 and 90days(anyone period) as DA ( documents against acceptance) terms. After accepting the documents for payment in thier Bank ,get the BL for clearing the goods:after the said period they will pay the amount to the Bank. and clear the goods: Take the goods and sell and pay the money.
22 Jul 2008 23:30
Post 8 of 10
Quoting from [Capur]:
Replying to [curdrice]:
Replying to [parvez]:
Dear Sirs,
I am writing a brief note on your question and trying to put a very simple reply of your question, so that even a layman can understand it. If needed the questions can be replied in more details.
Q. What is 60 days DA?
60 Days DA means the exporter has agreed to sell goods on 60 days credit. D A stands for Documents against Acceptance.
Ravindra K Kapoor
INTERNATIONAL SERVICES
To prevent spam, do not enter your contact information - Moderator
Just a few comments: (1) the 60 days' period - whether by way of collection bills or under LCs - can be counted from the date of shipment, from the date of presentation and acceptance, from the date of the invoice and so on, i.e. as decided between the parties concerned, and (if applicable) as incorporated in the LC. (2) The risk for the seller is greater in DA bills as compared to against * bills - if not presented under an LC. (3) Revocable LCs had gone out of fashion years ago. They are no longer included in UCP 600 either.
23 Jul 2008 06:00
Post 9 of 10
This is the controversial of AT SIGHT vs USANCE ?
this LC is at sight, but since add with D/A 60 days .... it become Usance
So .. need to know better about D/P & D/A which is combined in the L/C ?
regards,
this LC is at sight, but since add with D/A 60 days .... it become Usance
So .. need to know better about D/P & D/A which is combined in the L/C ?
regards,
SIGNATURE:
About Our Company
23 Jul 2008 10:43
Post 10 of 10
Quoting from [Oneuni]:
This is the controversial of AT SIGHT vs USANCE ?
this LC is at sight, but since add with D/A 60 days .... it become Usance
So .. need to know better about D/P & D/A which is combined in the L/C ?
regards,
It is either * (payable on demand/presentation) or DA (payable after some fixed period of time). It cannot be both at the same time. There is no controversy. The concerned parties would choose the terms they mutually agree on.
05 Aug 2008 02:05
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