Payments in foreign trade: Unlike payments in the home trade, payments in foreign trade are often complicated . the cheque which is the chief means of settling business debts in the home trade. Is not suitable for making payments in foreign trade since it is payable only in the drawers country. This applies also to the credit transfer or bank giro system. It is here that the banks play an essentially important part. Their services are used at some stage or other in every foreign trade transaction and are almost indispensable. Settlements of foreign debts may be made in a number of ways- by bankers draft, bankers transfer(mail, Telex and telegraphic), letter of credit, bill of exchange and promissory note. The method of payment adopted by the importer will depend upon the arrangement made with the exporter when the order is placed and this in turn will depend on the exporters knowledge of the importer and the extent to which he is prepared to trust him. Admin 7….
Posted on: Sat, 20 Dec 2014 12:41:48 +0000
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