The different documents related to payment are as follows :
- Letter of credit: It is a guarantee letter issued by
the importer’s bank stating that it will honour the export bills to the bank of the exporter up to a certain amount. It is the most appropriate and secure mode of payment.
- Bill of exchange: It is a written document whereby
the person issuing it directs the other party to pay a specified amount to a certain person or the bearer of the instrument. In export and import transactions, the exporter draws the bill on the importer asking him to pay a specified amount to a certain person or the bearer of the instrument. The documents required by the importer for claiming the title of exported goods are passed on to him only when the importer accepts the bill.
- Bank certificate of payment : It is a certificate that the necessary documents (including the bill of exchange) relating to the particular export consignment have been negotiated and payment has been received in accordance with the exchange control regulations.