North Central Railway
No. 11PR/01/2020Press ReleaseDate: 31.01.2020
North Central Railway educates domestic vendors on Letter of credit facility to boost “Make in India” initiative
A vendor meet was organized by North Central Railway for educating domestic vendors on facility of payment through “Letter of Credit” mode. This vendor meet jointly organized by North Central railway and State Bank of India was chaired by Sri Rajiv Chaudhry General Manager North Central Railway and attended by large number of domestic suppliers and venders.
A letter of credit (LC), also known as bankers commercial credit is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to the supplierof goods or services. Letters of credit are indispensable for international transactions since they ensure that payment will be received. Using documentary letters of credit allows the seller to significantly reduce the risk of non-payment for delivered goods, by replacing the risk of the buyer with that of the banks. Letters of credit have become a crucial aspect of international trade, due to differing laws in each country and the difficulty of knowing each party personally. LOC had been in use in very high value domestic purchases too, however,in line with Government of India vision to give impetus to Make in India initiative and to promote medium and small sized domestic producers and suppliers of goods &services this facility is extended and promoted for domestic transactions also. Railway which is one of the biggest purchasers of goods and services from open market to meet its mammoth operation and maintenance need has made provision for LOC payment facility in domestic supplies since Feb-2018.
At the outset Principal Chief Materials Manager NCR Sri P N Pandey welcomed GM Sri Chaudhry and all participants in this vendor meet organized in HQ office of North Central Railway. He said that despite facility being available its use remained limited in domestic transactions due to lack of awareness among suppliers and this meet will help in maximizing its usage. Principal Financial Advisor NCR Sri Ajay Mathur also explained benefits of LOC to increase its usage. Sri A K Jha Dy General Manager of State Bank of India explained benefits of LOC and said that it would help in solving problem of working capital for small domestic suppliers though timely and assured payment against supply. A detailed presentation was made by team of SBI officials explaining benefits of LOC and queries of vendors related to LOC were addressed.
General Manager Sri Rajiv Chaudhry in his address to the gathering said that North Central Railway treat each of its vendor as partner in growth and development of Railways. He said that Letter of credit facility which is now available in all domestic purchases and tenders of Railways will help in timely availability ofworking capital to small and medium players and thus will give a boost to important initiative for “Make in India”. He added that it will also be beneficial for Railways as service and goods shall be available at cheaper price through guarantee of timely payment thus a win-win situation for both partners.
This vendor meet was attended by all principal head of departments of NCR andofficials from , SBI, National small scale industrial corporation (NSIC) and over 70 venders from all over country like NBC bearing , Fevilay transport , ABB , MedhaServodrives , Frontier Steel & alloys , Knorr bremseetc .