FDBP
FDBP stands for 'Foreign Documentary Bills Purchase'. This facility is provided to negotiate (purchase) Foreign Documentary bills/documents submitted by the exporter on export made against export L/C denominated in Foreign Currency.
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Features
- This is a demand loan.
- This is a mode of export finance.
- All specific FDBP and each FDBP created under a revolving limit are demand loan by nature.
- The documents/bills have to be in order as per export L/C terms.
- Cash drawing allowed under FDBP after adjustment of BTB L/C, PC, and other liabilities associated to the particular export.
- Usually has no fixed tenure but maximum tenure may be allowed is 21 days for sight L/C and as per stipulated usance period for usance (DP) L/C.
- Rate of interest: In case of Sight L/C, interest not applicable for 21 days and in case of usance (DP) L/C, interest not applicable for the usance/deferral period. Usually bank earns from exchange rate difference. But in case of overdue, interest will be charged in commercial rate.
Rate