A Trust Receipt is a document signed by the borrower on the strength of which the bank releases shipping documents to the borrower who will hold the merchandise as trustee (s) for the bank. When the merchandise has been sold, the borrower will pay to the bank the principal amount plus interest.
Trust Receipt is a facility to finance documents against: -
Letters of Credit or.
Inward Bills for Collection
Open Account basis
The approval for Trust Receipt financing must clearly indicate whether financing is allowed for documents drawn under LC's, Inward Collection Bills presented by Banks and/or directly by sellers, or on open account basis in the Credit Authorization or Letter of Offer. The approval must indicate the list of names of approved principal domestic sellers in Banktrade Account Master Standing Instructions unless otherwise specified.
