1. the relative letter of credit specifically provides for negotiation of FCR in lieu of bill of lading and
2. the relative sale contract with the overseas buyer provides that FCR can be accepted in lieu of bill of lading as a shipping document.
This Circular has relaxed the above conditions, and provides that:
1. Banks can accept FCR issued by IATA-approved agents, in lieu of bill of lading, for negotiation/ collection of shipping documents, in respect of export transactions backed by letters of credit, if the relative letter of credit specifically provides for negotiation of this document in lieu of bill of lading even if the relative sale contract with the overseas buyer does not provide for acceptance of FCR as a shipping document, in lieu of bill of lading.
2. Banks can, at their discretion, also accept FCR issued by shipping companies of repute/IATAapproved agents (in lieu of bill of lading), for purchase/ discount/collection of shipping documents even in cases, where export transactions are not backed by letters of credit, provided the ‘relative sale contract’ with overseas buyer provides for acceptance of FCR as a shipping document in lieu of bill of lading.