FAQs

Q. What are the types of LC?
Ans.

  • Revocable LC
  • Irrevocable LC
  • Confirmed LC
  • Revolving LC
     

Q. What are the documents to be enclosed with Advance Payment case?
Ans. Following documents are required for making advance payment:
 

  • Advance payment sanction by CFA (ink signed copy)
  • Advance bank guarantee (in case of waiver of the same, sanction by Defence Secretary to the
  • effect may also be enclosed)
  • Form 1A (in case of procurement cases)
  • Form 2A (in services cases)
  • FEMA certificate
  • FFE releasing note from the Ministry/Service HQ
     

Q. What documents are required for opening of LC?
Ans. Following documents are required for opening of LC:
 

  • Contract (in original)
  • Sanction of the CFA (ink signed copy)
  • Annexure-D
  • Form-2 (Swift-700)
  • Form-IA
  • FEMA certificate
  • FFE releasing note from the Ministry/Service HQ
  • Forwarding memo


Q. What documents are required for Direct Bank Transfer?

Ans.
Contract (in original), Sanction by CFA (ink signed copy), Annexure-D, Form-2 (Swift-700), Form
1A for supplier, FEMA Certificate, FFE releasing/Noting, Forwarding Memo, invoices,  airway bill, packing list and other documents as per contract.

Q. How is amendment/extension of LC carried out?

Ans
. Directorates will prepare the case for amendment/ extension duly supported by attested copies of CFAs approval with financial concurrence from IFA/MoD (Finance), clearly specifying as to who will bear charges for the amendment.

Q. What happens if delivery period expires and goods are not delivered?

Ans
. Directorates will propose the case for extending the delivery period duly supported by approval of the CFA.  Such DP should clearly mention weather the same is with Liquidated Damage (LD) or without LD.  The concurrence of the IFA/MoD (Finance) needs to be obtained in all the cases.
Extension beyond twice the original delivery period would require the sanction from the next higher CFA from the original one.

Q. Whether Performance Bank Guarantee of foreign Banks need confirmation from Indian Nationalised Banks?


Ans
. Confirmation from Indian nationalised banks and private banks conducting Govt. business like ICICI, HDFC, Axis Bank is required for all Foreign Bank Guarantees.

Q. Can letter of credit (LC) be opened if delivery period has been expired?

Ans
. No, LC can not be opened if delivery period has been expired. Delivery period needs to be extended before the LC can be opened.