Professional Documents
Culture Documents
What is PAD?
PAD is a kind of Post Shipment Import Trade Finance given by the Bank to the
Importer. After receiving the concerned negotiated bill from the Negotiating
Bank, the Issuing Bank has to check the documents very carefully within a
stipulated time (within 3 days). If the bank founds those without any
discrepant, the bill has to be lodged and debit PAD A/C, which is the direct
liability of the Importer.
Accounting:
After debiting the PAD A/C bank has to inform the Importer & also to advise
him to Retire the bill within a stipulated time (within 30 days or the date
of arrival of the consignment whichever is earlier).
LIM is the short-term loan to the Importer, if he fails to retire the bill
within the stipulated time. In LIM, after releasing the goods from the Customs
authority, the possession of the goods remains with the Bank i.e. under
banks lock & key.
Purpose: To release the imported merchandise from the Customs authority.
Types of LIM
Accounting:
Dr. LIM A/C ( In the name of Importer)
Cr. PAD A/C
(Contd. at next page)
Page # 02
after lodgement
When the importer does not come to the Bank for retiring the Bill, Bank
has to clear the imported goods from the Customs authority under banks
authority by creating a Lim A/C in the name of the importer, which is known
as Forced Lim. Before creating Forced Lim, bank has to calculate
1.
2.
Obtain approval (GM & above) through Office Note. Besides other
information the office note must contains the followings;
A.
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
a)
LIM Limit
b) Purpose
c) Rate of Int.
d) Period
e) Mode of
payment
f) Security
g) Insurance
:
: Clearance of Consignment from the port,
imported under L/C No.___________Dt.____
:
: Max. 30days from the date of approval for
commercial goods
Max. 60days from the date of approval for
industrial raw materials.
:
: 1)Letter of undertaking & authority to clear &
sell of goods
2) Other sufficient tangible securities
: Comprehensive Insurance Policy to be
obtained in joint name.
:
h) Other
conditions
All the formalities regarding creation of Lim should be strictly
followed
Page # 03
Obtain Letter of undertaking & authority to clear & sell of goods from the Importer
Entry in LIM Register
Obtain Insurance Policy
Send the documents after proper endorsement, certification (where necessary) to our
designated Branch (near the concerned customs office Branch) with forwarding.
Survey the goods before taking delivery.
Clear the goods through Banks approved C&F agent.
Pledge the goods through Pledge letter.
1.
2.
3.
4.
Ref.
01.
02.
03.
04.
05.
06.