Summer internship on letter of credit

1. Presented By:
Shivam Kumar
MBA-IB
Section-H
A1802011101

2. Company Profile
 Cobra Group
Facts -
 Year of Establishment:1944 (Madrid, Spain) 1999(India)
 Services Provided : Engg. Const. & Maintenance of Industrial and
Energy Infrastructure. Other Services Provided to Telecom and
Railway Systems and Mechanical Erection of Infrastructure.
 Employees: More than 1000 (India) , Approx 22000 Overall
 Turnover: More than US$ 100 Million (or >Rs. 400 Crore Approx.)
 Major Markets:
 Indian Subcontinent, East/Middle Africa, North Africa, South/West
Africa, Middle East, South East Asia and North America

3. SWOT ANALYSIS
 Strengths: Opportunities
 Strong order book Position. Organic and Inorganic Growth.
Growing Global Demand for
 Broad Product Portfolio.
Electricity and Electrical Goods.
 Robust Growth Rates.
Threats:
 Weaknesses
 Increasing Raw Material
 Asbestos Litigation. Prices.
 Lack of skilled labor Intense Competition.
and technical staff. Exposure to Government
Regulations.

4. Objective & Scope of the Study
Objectives:
 To gain exposure in the field of International Business.
 To study various Methods of Payment.
 To analyze the issues during documentary credit
procedure.
Scope:
 To guide the importers and exporter while applying for
LC.
 The readers can come to across the sample letter of credit.
 To guide Readers to know about the procedures of LC.

5. Research Methodology
 Descriptive Research: Descriptive Research includes surveys
and fact finding enquiries of different kinds. The main
characteristic of this method is that the researcher has no
control over the variables; he can only report what has
happened or what is happening.
 Questionnaire on Letter Of Credit Compliance. Sample size
was 15 Individuals.
 Personal Interviews with Managers of different banks like
HDFC Bank, Kotak Mahindra Bank and Corporation Bank
regarding cause of Discrepancies in the Documentary Credit
Process.

6. Methods of Payment
Payment will be made after goods being sold in import country
Delivery first before payment
Delivery first before payment (through bank)
A guarantee for payment by Bank
Pay first before delivery
Exporter’s Risk

7. Analysis
Method Of Payment Type Of Letter Of Credit Preffered
10% 10%
30% Advance Payment
Revocable
20% 20% 20%
Open Account sight
Irrevocable
Letter of credit
Transferrable
Revolving
Documentary
Collection
40% 40%

8. Findings (Discrepancies)
Discrepancy Reason Responsibility
Inconsistent Data Different Information Between Exporter
the different Documents
Absence of Documents Documents Reqd. by the letter Exporter
of credit are missing
Late Presentation Documents presented later Exporter
than 21 days after shipment
Incorrect Data Information on the set of Exporter
documents is not in conformity
with the LC
Carrier not named and signing The name of carrier on the Exporter
capacity airway bill is missing or not
signed on behalf of the carrier
L/C Expired Document presented after Exporter
expiry of LC
Incorrect/Absence of Bill of lading may not be Exporter/Insurance company
Endorsement endorsed by exporter

9. Recommendation
 One has to keep in mind that the Advising bank can tell us what is wrong
with a letter of credit but cannot help us to amend it.
 Review the Letter of Credit when it is First Advised and work with your
Buyer to Amend it.
 Do not open revolving letter of credit without the safety letter of credit.
 Verify imported items under the LC.
 Make the Letter of Credit Terms and Conditions part of the Sales Process
not the Shipping Process.