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rural marketing in Indian economy

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SUBJECT: International Business
Case Study 1 - Documentary Credit (Marks -16)
M/S Auto India
Introduction
M/S Auto India is a public limited company; they manufacture SUVs (sports utility
Vehicle), in technical collaboration with General Motors of USA. The company has established their
manufacturing base at Ranjangaon in Pune. They have acquired an area of 250 acres and the total
project cost is estimated at Rs 1500 crores. As per the projections, the company is slated to achieve a
25% market share in the Indian market, within a period of two years.
Out of the total project cost, 49% is brought in by General Motors and the rest is tied up with financial
institutions, international banks and Indian banks. The working capital is financed by a consortium of
banks in which Global bank, Pune branch, is the leader. The company imports many parts of the car
engine in a CKD (completely knocked down) condition from General Motors, Detroit, after establishing
import letters of credit through its main bankers, Global Bank, Pune Branch.
M/S Auto India approached Global Bank, Pune for opening of import letter of credit as per UCP ICC 600
for USD 100,000, on sight basis, in favour of General Motors, Detroit.
Type of credit - Irrevocable negotiable
Application - UCP ICC 600
Applicant - M/S Auto India, Pune, India
Beneficiary - M/S General Motors, Detroit, USA.
Issuing Bank - Global Bank, Pune, India
Advising Bank - The American Bank, New York
Negotiating Bank - The American Bank, New York
Reimbursing Bank - International Bank, New York
Availability - Negotiable at sight
Expiry - At the counters of The American Bank, New York
Amount - USD 100,000
Merchandise - Car engine parts
Quantity and price - 50 units @ USD 2000 per unit
Circumstances
Issuing Bank
Global Bank, Pune issued its irrevocable negotiable credit through its head office in Pune
since Global Bank co-ordinated all its accounting and communication functions at its head office. The
Bank’s head office transmitted the credit through Swift network as

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 SUBJECT: International Business Case Study 1 - Documentary Credit (Marks -16) M/S Auto India Introduction M/S Auto India is a public limited company; they manufacture SUVs (sports utility Vehicle), in technical collaboration with General Motors of USA. The company has established their manufacturing base at Ranjangaon in Pune. They have acquired an area of 250 acres and the total project cost is estimated at Rs 1500 crores. As per the projections, the company is slated to achieve a 25% market share in the Indian market, within a period of two years. Out of the total project cost, 49% is brought in by General Motors and the rest is tied up with financial institutions, international banks and Indian banks. The working capital is financed by a consortium of banks in which Global bank, Pune branch, is the leader. The company imports many parts of the car engine in a CKD (completely knocked down) condition from General Motors, Detroit, after establishing import letters of credit through its main bankers, Global Bank, Pune Branch. M/S Auto India approached Global Bank, Pune for opening of import letter of credit as per UCP ICC 600 for USD 100,000, on sight basis, in favour of General Motors, Detroit. Type of credit - Irrevocable negotiable Application - UCP ICC 600 Applicant - M/S Auto India, Pune, India Beneficiary - M/S General Motors, Detroit, USA. Issuing Bank - Global Bank, Pune, India Advising Bank - The American Bank, New York Negotiating Bank - The A ...
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