CII Naoroji Godrej Centre of Manufacturing Excellence
Programme on
Managing Risks in International Trade with
Letters of Credit, Standby Credit and Bank Guarantees
Operational issues with case studies
12 – 13 July 2017
When Indian companies are receiving good export orders from under developed countries they are not able to avoid the
country risk and default risk of the buyers. Naturally exporters are trying to manage their risks through Letters of credit
or bank guarantees. Even after receiving such letters of credits most of the transactions could not be completed
successfully and the exporters’ payment could not be realized. International Chamber of Commerce (ICC) Paris
conducted survey to find out the reasons for such defaults in LC transactions. It was observed:
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Beneficiary (exporter) accepts letters of credit with risky conditions without properly understanding the
significance of such conditions
Certain conditions are included modifying or avoiding the prescribed UCP Rules
Documents presented under letters of credit are having avoidable discrepancies
Interpretation of the document checker at the LC issuing bank are not uniform
While presenting the documents proper care not taken by beneficiary in repeatedly discrepancies are
In case of import transactions covered under letters of credit, at times importers are not able to get the same
consignment that was covered in the letter of credit.
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Letters of credit not prescribing appropriate document
Letters of credit established without properly assessing the counter party / overseas seller.
As far Bank Guarantees, format of the guarantee is not acceptable in most of the cases either to the bank or the
beneficiaries. Foreign currency guarantees are subject to Uniform Rules for Demand Guarantees (URDG 758). Domestic
guarantees are conveniently avoiding reference of these Rules.
Certain companies are insisting Standby Letters of credit instead of Bank Guarantees and letters of credits.
Taking into consideration of above issues, this two days program is designed to address the operational issues on these
instruments with specific reference to the set of related Rules like UCP 600, ISBP 745, URDG 758 and ISP 98.
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UCP 600 for letter of credit transaction is in operation since July 2007 followed by International Standard
Banking Practice on examination of documents under letters of credit. Implication of the most important UCP
Articles with relevance to LC operations will be discussed thoroughly.
To standardize the practices adopted by the banks in different countries for examination of documents under
letters credit ICC published a set of guidelines titled as “International Standard Banking Practice (ISBP) for the
Examination of Documents under Documentary Credit”. This latest publication (1st July 2013) has dealt with
298 Issues that are commonly arising in the letter of credit transactions and explains in detail some of the
articles of UCP 600 with the proper interpretation. It discreetly addresses the issues that commonly arise but
not expressly treated in UCP 600.
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Most of the corporate / companies dealing in letters of credit transactions are either unaware or not fully aware
about these changes. By understanding these changes exporters will be able to present discrepancy free
documents and the document examiners will have more professional approach in examining the documents.
Bank guarantees are governed by a set of Rules known as Uniform Rules for Demand Guarantees (URDG 758)
which has come into effect from 1st July 2010. Discussions on the provisions of these Rules will be with a draft
guarantee format and a set of practical issues.
Standby letters of credit are on demand in the market now. Standby credits are governed by International
Standby Practices (ISP 98). Provisions of ISP 98 will be compared with URDG 758 and UCP 600.
Coverage and Contents
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Features of International Trade Contracts - significance of INCOTERMS 2010 in international commercial
contracts and letter of credit transactions
Technical discussions on important UCP 600 articles – with practical cases - International Standard Banking
Practice (ISBP 745) on examination of documents
Structuring LC transactions for imports – detailed discussions on SWIFT MT 700/710 & SFMS formats with
specific reference to UCP 600 Articles and amendments.
Handling export LCs- at the time of receipt and at the time of presentation of documents by an exporter –
practical exercise – check list for exporters
Examination of documents under LC transaction – practical exercise – discussions with specific reference to ISBP
745 – useful for bankers who are handling documents under LCs
Issues relating to inland LC transactions – specific discussions on UPAS (Usance LC Paid At Sight)
Case study – Important ICC Banking Commission opinions – certain court decisions on LC transactions.
Case study on Bank guarantees and Standby Letters of Credits.
Who will benefit Most by This Programme
 Corporate having international exposure on cross border trade and domestic trade handling letters of credit,
bank guarantees
 Shipping company professionals handling cargoes
 Marketing in charges & finance heads of export firms who are frequently dealing in LC transactions
 Importers having high value transactions who want to ensure due compliance of the contractual obligations by
the overseas sellers through proper documents – Procurement team and logistic team
 Bankers handling trade finance under retail and wholesale banking dealing in LC, SBLCs and Bank guarantee
transactions regularly, for updating their professional skills to serve their clients more efficiently.
NOTE: IF YOU HAVE ANY SPECIFIC ISSUES ON LC /GUARANTEE/STANDBY LETTER OF CREDIT, YOU CAN
FORWARD THE QUERIES IN ADVANCE SO THAT WE CAN ADDRESS ALL THOSE ISSUES SPECIFICALLY IN THE
PGM. CONFIDENTIALILTY WILL BE MAINTAINED.
Faculty: This programme has been structured and will be delivered by Mr K Parameswaran. He started his career as
a banker and spent 35 years. He has now been practicing in the field of International Trade and Finance for more
than 15 years. He has conducted in-house programmes on Letters of Credit and Trade Finance for Corporate like
Adani group, BASF (India), BALCO. Blue Star, CEAT, Essar Steel, Essel Packaging, Genpact, Godrej Industries,
Hindustan Petroleum., Hindustan Zinc, JSW group companies, J K Industries, Kalpataru group, Larsen & Toubro
group companies, Mahindra group of Industries, Outokumpu, Pidilite Industries, Raychem RPG, Sterlite group, Tata
International, Tata Motors, Tata Projects, Tecnimont, Technova, Thermax, ThyssenKrupp Ltd., Toyo Engineering,
Welspun, WIPRO, Wockhardt Ltd, etc.
Other organizations with which he is professionally connected are Barclays Bank, BNP (Paribas), Citibank, Deutsche
Bank, DBOI, Dun & Bradstreet, ECGC, e-Serve, TCS, FEDAI, HDFC Bank, HSBC Ltd, ICICI Bank, ICC (India), Indo German
Chamber of Commerce, Indusind bank, IDBI Bank, Institute of Chartered Accountants of India, Institute of Company
Secretaries, Kotak Mahindra Bank, Societe Generale, Standard Chartered Bank, Wells Fargo and World Trade Centre.
He is with S.P. Jain Institute of Management and Research, Mumbai as an Associate Professor handling International
Finance.
Dates & Schedule of Sessions: 12 – 13 July 2017
Registration: 12 July 2017
9:15 a.m. to 9:30 a.m.
Sessions: 12 – 13 July 2017
9.30 a.m. to 5.30 p.m.
Venue : CII Naoroji Godrej Centre of Manufacturing Excellence, Godrej Station-Side Colony, Opposite
Railway Station, Vikhroli (East), Mumbai – 400 079
Participation Fees (on non-residential basis)
Type of Organisation
Fees per Participant
CII Members (Large & Medium)
Rs 11000/- (+ Tax as applicable)
CII SSI Members
Rs 8500/- (+ Tax as applicable)
Non Member Companies
Rs 12500/- (+ Tax as applicable)
Fees include participation, course material (hard copies), working veg lunch and tea / coffee. Advance payment
of fees is to be drawn in favour of “Confederation of Indian Industry”.
Discount
5% on 2 nominations from an organization.
10% on 3 or more nominations from an organization.
Participation fees is non-refundable/ non-adjustable against any other programme of CII, but change in
nomination(s) is accepted.
Registration: Prior registration for participation by the sponsoring companies is necessary. Number of
participants will be limited to 20.
Certificate of Participation will be given to the participants.
Nominations & Enquiries: Amita Samant
CII Naoroji Godrej Centre of Excellence
Godrej Station-Side Colony
Opp Railway Station, Vikhroli (East)
Mumbai – 400 079
Tel: (022) 2574 5146 / 5148
Email: [email protected] / [email protected]
CII Naoroji Godrej Centre of Manufacturing Excellence
Programme on
Managing Risks in International Trade with
Letters of Credit, Standby Credit and Bank Guarantees
Operational issues with case studies
12 – 13 July 2017
We nominate the following manager/s to attend the Programme
Name
Designation
Email / Telephone
1
2
3
Our Cheque / Demand Draft dated __________ No. _________ for Rs. ________________ drawn in favour of
“Confederation of Indian Industry” payable at Mumbai is enclosed.
Name:____________________________________________Designation: ___________________________
Organisation: _____________________________________________________________________________
Address: _________________________________________________________________________________
_________________________________________________________________________________________
CII Membership No: _________________________ Telephone: _____________________________________
Fax: _______________________________Email: ________________________________________________
Signature & Stamp of the Nominating Authority: __________________________________________________
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Participation fee is non – refundable / non-transferable against any other programme of CII. However,
change in nomination(s) is accepted.
Programme is non – residential.