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Why Tata Motors has selected Sanand As per their location?
Land which has been provided to Tata Motors for establishment of Nano plant was already under the possession of the government of Gujarat which reduced time for relocation of plant, while government of Gujarat was providing land at cheaper rate than market rate which has also been a matter of controversy for some time. Weakness of singur became strength of Sanand.
Where Tata Motors manufacture Nano apart from Sanand?
Except Sanand, Tata motors also manufacture Nano at Pantnagar, Pune Maharashtra. Sanand Plant has begun with capacity to manufacture 250000 car p.a. which is expandable upto 500000 units pa.
What is an important of 11/09?
Twin Tower World Trade Centre located at Lower Manhattan, New York, destroyed on Sptermber 11 2001, Gutkha shall be prohibited from today in Gujarat. Maharashtra government recently imposed a comprehensive ban on gutka and pan masala. Gutka is also banned in Kerala, Madhya Pradesh and Bihar, while Rajasthan government had last month announced its decision to ban the product.
Its important for me personally is I got my first job appointment letter on this day.
What is causing devaluation of rupee against dollar?
When we are running government in coalition environment, it is very difficult to take decision on foreign direct investment and once we open our market we must keep on renewing our policies to attract foreign direct invest which India government sometime failed to do.
Being important export destination eurozone crisis has affected India’s export growth, while we are increasing our import of oil and gold which is giving birth to twin deficit of fiscal and current account.
Recent corruption scam and political uncertainties has also lead to rupee depreciation.
How exchange rate of the currency is determined?
Exchange rate is the rate between two currencies at which one is exchanged for another. Exchange rate to the extent I know is decided by the market factors like demand and supply of the currency. In the long run rates of various currencies are determined by some fundamental like:
Balance of payment,
Economic Growth Rate- high growth leads to rise in imports and exports.
Interest Rate: High domestic rates tends to attract overseas capital thus curreny shall appreciate in short term
Fiscal Policy : like expansionary policy leads to, high liquidity and kick starts high growth rate
What is Bill discounting?
Under this facility to seller or exporter, bank purchases bill having maturity on some future from seller (generally its customer) and pays him the amount of bill after deducting some commission and discount and forwards bill to LC issuing bank or reimbursing bank as the case may be who on maturity date shall reimburse the discounting bank
What is usance bill?
Bill of exchange which will be paid when it is presented to drawee within a fixed period from the presented date or after a fixed period of B/L date. Sight bill which is paid when presented
What is bill collection?
Collection is one of the conventional methods of payment in international trade whereby the seller forwards financial and/or commercial documents to the buyer against cash payment or acceptance of a bill of exchange. In collection, banks control the release of documents and payments based on the Uniform Rules for Collection but do not commit to pay the seller, unlike documentary credit operations. There are three types of collection, documentary collection, clean collection and direct collection. Bill sent on collections are governed by URC 522, which stands for uniform rules for collection, ICC publication number 522.
Banks are permitted to invest in equities subject to a ceiling presently 5% of its total assets.
What is NRI?
As per FEMA 1999, a person resident outside India who is a citizen of India, or a person of Indian origin who is citizen of of any other country other than Bangladesh or Pakistan who at anytime held an Indian passport or had parents of Indian origin or a person is a spouse of Indian citizen.
What is OCBs?
OCBs are overseas corporate bodies they are the firms, trusts or companies predominantly owned by non resident Indians, NRI must hold at lease 60% of its share.
NRO Account?
NRO accounts are rupee accounts maintained by any person resident outside India an also by foreign tourists who is on short visit to India . unlike NRE account this account can be opened jointly with resident Indian, maintained for credit a accruing in India out of investment made prior his leaving india. Can be maintained in Saving Account, current account, recurring account and as term deposit. TDS deductible.
Bank to bank reimbursement is governed under the URR 525 rules.
Certificate of Origin determines the origin of goods. It is issued by chamber of commerce.
Insurance policies of goods unless mentioned specifically, shall be deemed to be of 110% of CIF value of goods.
What is crystallization?
Crystallisation means a conversion of foreign currency bill which is outstanding on 30th after NTP due date. All the bill purchased/negotiated/discounted shall be crystallized by converting it into rupee liability at bill selling rate on 30th day after expiry of NTP in case of demand bill OR on 30th days after expiry of notional due date.
What is stand by letter of credit?
Sir, stand by letter of credit is almost a bank guanretee, this type of LC is used in countries where there is a restriction in opening guarantee, used mainly in situation of ‘non-performance’. Such LCs are used in countries like USA where they are substitute of financial or performance guarantee.
Export Document Submission
Export of goods from India, whether in physical form or any other form requires to be declared in prescribed forms:
GR Form: All exports other than in Post parcel
PP Form: All exports in form of parcel
Softex: Export of softwares
SDF Form: with introduction of EDI- electronic data interchange, SDF – Statutory Declaration Form has replaced GR forms.
Export is required to submit the export documents along with the duplicate/exchange control copy of GR/PP/SOFTEX form within 21 days from the date of shipment to an authorized dealer for collection purchase.
If the export proceeds are not realized in time then exporter should apply to its AD who handled the documents in ETX form for extension of time, Ads are permitted by RBI to grant extension of upto 6 months beyond 12 months. It is to be reported to RBI in XOX statement which must be submitted in December & June each year
What is EPC or Pre-shipment Finance?
EPC stands for Export Packing Credit. It is an essentially a working capital required to procure, process and manufacture goods for the purpose of export. For allowing EPC it is pre-requisite that the borrower must have a FIRM export order or an export letter of credit, and the loan must be liquidated out of its relative export. Maximums concession rate for export must be 2.5% below BPLR. Banks cannot EPC 180 days and 360 days, but EPC granted beyond 360 days cannot avail concessional rate.
What is Post Shipment finance?
Post shipment finance is essentially an advance against receivables, which is in the form of export document. It involves handling of export documents, sendint it to foreing bank and collecting proceeds thereof.
What is the difference between export bill purchased/discounted and export bill negotiated?
Export bill representing genuine trade transactions and strictly drawn in terms of contract may be purchased/discounted by bank. Sight bills are purchased where usance bills are discounted banks. They are not backed by Letter of credit, risk of non payment is higher. While export bill negations are the transaction backed by the letter of credit and are governed by the UCPDC.
Some of the discrepancies
Late shipment of goods,
Submission of document after LC expires
Excess drawing of LC
Shipment made from and/or shipped to the ports other than stipulated in LC.
What is NTP?
NTP stands for Notional Transit Period which is used for determining the due date of all foreign currency bills, for demand bills they are 25 from the date of handling, for usance bill it is usance plus 25 days. Banks allows concessional interest rate for NTP bills
What is PCFC?
PCFC stands for Pre-shipment Credit in Foreign Currency, it can be allowed to exporters in foreing currency, as being allowed in INR. The PCFC can be allowed in USD, Pound Sterling, Euro or JPY. The PCFC can be allowed for period of maximum 180 days. The spread for PCFC is related to international reference rates, such as LIBOR/EURO banks are not allowed to charge 2% over the benchmark for 180 days. PCFC can be liquidate by discounting / rediscounting the foreign currency bills.
What is gold card status?
Introduced by foreign trade policy of 2003-04 gold card status scheme is for creditworthy exporters with god track record for easy availability of export credit on the best terms.
What is Factoring?
Factoring may be defined as a continuing agreement between a financial institution and a business concern selling goods to track customers on Open account basis. Whereby factor(bank) purchases the book debts of seller(central function of factoring)
In terms of RBI guidelines, an AD has to ensure receipt of Bill of entry in all cases where the value of foreign remittances for import exceeds USD 100000 or its equivalent, within 3 months from the date of remittance.
If a person wanted to make remittance in excess of USD 100000 or its equivalent as advance payment for import they must produce standby letter of credit or bank guarantee issued by bank of international repute (not applicable if approval by board of director of bank)
All cases beyond USD 5000000 should be referred to RBI, for prior approval.
Physical import into India must be made within the period of six month from the date of remittance and 3 years if capital goods, and if the good is not imported in India, AD should ensure that the amount of remittance is repatriated to India or utilized for other permissible use.
Buyers Credit
Sir buyers credit is arrangement by buyer made to settle its import transaction from the bank/institution situated outside India, seller/seller’s bank shall get payment on due date from such Institution. This arranging institution shall charge some interest and charges if any to importer.
What is Supplier Credit?
Supplier’s credit is credit extended by the overseas suppliers of goods to the importer. Payment terms are either sight or credit. The period of credit depends on the requirement of seller to increase the sales. For a credit for a period of more than six months and less than three years has been termed trade credit and any credit extended for three years or more shall be in category of ECB.
What is ECGC?
ECGC stands for Export Credit Guarantee Corporation established by Government of India in 1957 to promote export and secure the exporter from various risk associated with export business. Like failure of buyer to pay the dues, or other political problems also.
International Banking Statistics return has to be filed by the banks quarterly on all international assets and liabilities of the bank.
BAL Statement is statement showing balance in nostro and vostro account.
What is the main difference in FEMA and FERA?
Sir to the extent I know main difference is that, under FERA any violation of act was dealt with under criminal law, while under FEMA they are dealth with under Civil Law only
A person resident in India can possess foreign currency notes which must not exceed USD 2000 or its equivalent but they can possess coin at any amount.
Traveler should surrender unspent foreign exchange within 180 days from his return
What is LAF or Liquidity Adjustment Facility?
Sir, liquidity adjustment facility is the principle instrument of the reserve bank of India to monitor day to day liquidity in the marker which comprises of the Repo and Reverse Repo instruments.
RBI under this system conducts daily auction of Repo/Reverse Repo for overnight funds. RBI may conduct repo auction twice or thrice a day, as the banks need to maintain their liquidity to meet payment obligations under RTGS system.
What is derivative?
Derivative as its name suggests does not have any independent value but it derived its value from the underlying security. Market can be financial or commodity.
What is Bank Guarantee?
A bank guarantee is a one-way contract between a bank as the guarantor and a beneficiary as the party to whom a guarantee is made bank on request of applicant and after assessing its credit worthiness and obtaining proper collateral issue bank guarantee which means on the event of failure of applicant to fulfill his obligation bank shall fulfill the same.
What is letter if credit?
Aletter of creditis a singed or authenticated document issued by buyers bank embodying undertaking to pay certain amount of money upon presentation of documents.
What is the difference between LC and BG?
Letters of credit ensure that a transaction proceeds as planned, while bank guarantees reduce the loss if the transaction doesn't go as planned.
A letter of credit is an obligation taken on by a bank to make a payment once certain criteria are met. Once these terms are completed and confirmed, the bank will transfer the funds. This ensures the payment will be made as long as the services are performed.