Trust Receipt (TR)
The bank releases the shipping documents to the importer who will hold the goods as trustee for the bank. The importer will be required to execute a TR document thereby undertaking to sell the goods and pay the bank the principal amount with interest. The bank actually provides a short term loan to the importer to settle the supplier.
Average tenor of the TR varies from 30 to 180 days and is determined based on the importers trade cycle to convert the goods into cash and pay the bank.
Bankers Acceptance (BA) – Purchase
A BA is an usance bill of exchange drawn by the importer to his order and accepted by the bank, payable on a specified future date. The BA is then discounted and the supplier paid off. The underlying commercial transaction to support the drawing of a BA can be shipping documents presented under an LC, documents presented on collection on D/P (documents against payment) terms, or invoices covering purchases on open account terms.
Minimum amount of a BA is RM50,000.00 and can only be drawn in multiples of RM1,000.00. Minimum tenor is 21 days. Maximum tenor will be subject to customers trade cycle, average about 180 days.
On maturity date, the amount of the BA will be charged to the importers' current account with the bank automatically.
The advantage of the BA facility is the financing at competitive prevailing money market rates.
Shipping Guarantee (SG)
At times, goods reach the destination port much earlier than the shipping documents. Extended storage of goods by the agents will incur demurrage. Under such situations, the importer who has imported the goods under an LC is issued a SG to clear the goods in the absence of the bills of lading. Subsequently, upon receipt of the shipping documents, the importer is to surrender an original bill of lading to the shipping company and retrieve the SG for cancellation.
Imports under Collection
We handle imports under collections (non-LC) against payment (DP) or acceptance (DA) received from your suppliers bank. At Affin Bank we can act as the Collecting Bank for any bank in this world. Your suppliers may entrust shipping documents to their banker with instructions to forward them to us.