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Request letter to bank for LC backed Bill / Invoice discounting (Sample)

LCBD is popularly known for the short of Bill Discounting backed with LC i.e. Letter of Credit.

Under 'bill discounting' method, a customer of the bank presents the bills or invoices (bills of exchange) to the bank for discounting i.e. advance selling of a bill. Wherein the bank deducts some amount as commission or discount from the total amount of the bills and pays the final amount to the customer immediately. Then on the date when the bills are due for payment, the bank presents the bills to the party who is supposed to pay the billed value and collects the amount. If there is any delay in realisation of bill amount after due date, then the bank charges interest on it as per agreed terms. This bill discounting system has been in practice for a very long time.


Following format can be used to request to the bank for LC backed bill discounting.

FORMAT
Date: ...............

To
The Manager
(Name of the Bank)
(Name of the Branch)
(Address)

Sub.: Discounting of documents under LC no. ............ dated ................. for Rs. ..........
Ref: Current account number: .........................

Dear Sir/Madam,

Our Company is maintaining a current account in your bank at .......branch, bearing account number ..................... With reference to the captioned subject, we are enclosing herewith the following documents:

1. LC bearing no. .......... dated ............ for Rs. ............. issued by (Name of the bank, branch).
2. Bill of exchange (no. ...........) for Rs. ...............
3. Invoice no. ......... for Rs. ............ dated ...............
4. Other documents : ..................

We request you to kindly discount the bill and credit the amount to the above mentioned current account (no. ....................) after getting irrevocable acceptance of liability and due date confirmation from LC opening bank.

We further authorize you to deduct from our account any applicable charges or commission in this regard.

We hereby solemnly declare that we have not financed the same documents/bill of exchange under the said LC/invoices with any other bank.

Kindly do the needful.

Thanking you!

Yours faithfully,
For ................Limited

  (signature)

Authorised Signatory

Encl.: As above

Comments

  1. jiban kumar saha7/16/2018

    thanks. i have used the format to write to the bank.

    ReplyDelete
  2. Shivani Mupparaju8/21/2018

    The format was useful. Thanks.

    ReplyDelete
  3. Roderick Lupu9/25/2018

    Brilliant. The template was urgently needed for use.

    ReplyDelete

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