Large business orders in the exports segment revolve around the Letter of Credit (LC) which essentially is a guarantee for payments given to a specific person or entity stating specific conditions that may vary from the date of delivery to the risk involved in logistics and the agreement between the buyer and seller.
One of the most important conditions set in the LC inclines towards the logistics partner for the transportation of the said consignment. It mandatorily demands the transporter to be approved by the Indian Banks Association (IBA) to fulfill the order.
Likewise, most of the industrial transactions in India, for example, orders related to precious metals, heavy machinery, luxury goods, and other products as may deem fit, are carried out upon fulfillment of the Letter of Credit which necessitates the consignment to be shipped by an IBA approved transporter.
Governed by the Banking Regulation Act, 1949, IBA is the premier service organization for the banking industry in India having all public sector banks, private banks, cooperative banks, and foreign banks as its members. Its objectives are mainly to promote and develop sound banking practices and principles in India. This august body is led by the Chairman Shri Sunil Mehta who is presently serving as Director (Non-Executive Chairman) at Punjab National Bank.
The IBA approval for Transport Operators is formulated only for the use and guidance of the Banks to facilitate lending against the security of Motor Transport Receipts issued by the Transport Operators. One such document is the Lorry Receipt. The IBA does not approve of any 3rd party dealing for such documents and therefore does not own the risk of recommendation.
Five important eligibility requirements for the issue of an Application Form IBA Scheme for Recommending Transport Operators to Member Banks:
- Both Heavy and Light commercial vehicles must possess national/ permits. National Permit for at least two owned vehicles is mandatory. The Trucks aging more than 15 years old will not be accepted.
- In the case of Public and Private Limited and Proprietorship Companies, the trucks should be registered in the name of the Company and their values should be reflected on the assets side of the audited Balance Sheet of the
- Capital requirement for the Scheme should be more than Rs.20 Lakhs.
- The scheme is meant for Transport Operators who are engaged in the business of Transport for more than two years.
- The Transport Operator should carry goods at Carriers Risk.
At MovingNow we have observed most of the companies that transfer their employees to other regions term IBA as an eligibility criterion for Packers and Movers to enroll in their vendor’s list. This measure is to ensure the correct licensing of the moving companies and their ability to take the insurance risk of the goods damaged in transit since the insurance policy issued by the insurance companies is covered only in case of accidents and does not cover handling risk.
The Movers and Packers certified by IBA are more expensive than the regular moving companies. We at MovingNow recommend their services only for the corporate enrolment and not for individuals who often search for economical transport services.
Visit our website https://www.movingnow.in or call us on 8886663106 to get the right information with regards to house shifting and transportation.