Document Check

This is a very important function and this should be done with great care. After receiving the document from the overseas supplier's bank the importer's bank will scrutinise them to verify the extent of correctness as per the terms of the L/C. For discrepancies in the documents following principles are adopted:

If discrepancies are such which violates any of exchange control or import control regulations, the documents should straightaway be rejected.

If the discrepancies are of trivial nature not affecting the character of the transactions the documents may be accepted on merits.

If the documents are rejected, immediate notice to that effect should be given to the bank to safeguard the importer's interests.The documents prescribed by the beneficiary are carefully scrutinised by the issuing banker.

The importer should also scrutinise the documents to ensure that:
  • They were presented when the credit was in force and had not expired.
  • The amendments and special instructions have been taken care of

  • The amount of bill does not exceed the value of L/C
  • All documents required in the L/C have been made available
  • Documents carry required endorsements
  • The documents do not contain discrepancies which violate any exchange control/import control regulations
  • The invoice is duly signed, tallies with amount of draft, Exact quantities are shown and is drawn in appropriate currency of the origin of goods
Bill of lading is presented in full set of negotiable copies and is on board bill of lading and duly signed In case the goods are imported on cash against documents(CAD), documents against payment(D/P) or documents against acceptance(D/A) basis, the importer needs to take delivery of documents from the banker before completion of the customs formalities. This process, known as retirement of documents, needs the importer to apply to authorised dealer/banker who is in possession of documents. This can be done by tendering the funds equivalent to the value of documents and the bank charges exchange control copy of import license, where applicable, Form A-1 duly completed for remittance of foreign exchange.

The documents are released to the importers against payment in case of DP bills and against acceptance in case of DA bills. The payment in either case is accepted only from the bank account of importer. If the bank is out of funds the interest is charged to the importer's account. For any overdue period a penal interest will be charged.