What does FDBP mean in INTERNATIONAL BUSINESS

A Foreign Documentary Bill for Purchase (FDBP) is a type of financial instrument used by companies to finance imports. It allows importers to purchase goods and services from foreign suppliers on credit, backed up by a third-party guarantee in the form of a bank or other financial institution. The FDBP typically covers the cost of the goods as well as any additional costs such as insurance, customs duties, and freight.

An FDBP provides an importer with the ability to pay suppliers outside their own country after receiving and inspecting the goods. The supplier issues an invoice and presents it to the importer's bank or other third-party guarantor along with related documents, such as bill of lading, packing list, and certificate of origin. At that point, the guarantor pays out money to cover the full value of invoice plus any additional costs to cover expenses associated with international trade such as commissions, taxes, insurance premiums etc. Once payment has been made by the guarantor, ownership transfers from supplier to importer.

An FDBP can be issued by any authorized financial institution like banks and competent authorities such as government agencies or central banks. Banks may be willing to provide financing on an FDBP if they understand that they will be repaid in due time according to terms of agreement between them and importer/exporter.

An FDBP transaction typically supports payments for imported goods; however this financing tool can also support payment for services rendered. Transactions may involve advance payments prior to shipment of goods or payment upon delivery depending on details negotiated between parties involved in a transaction.

That depends on multiple factors including complexity of underlying trade transaction, number of involved parties (e.g., issuer bank/guarantor), number documents required for contract execution/completion etc., but generally transactions can be completed within 10-15 days.

All international financial transactions carry inherent risks including currency exchange rate fluctuations and political instability in other countries where counterparties are located. Additionally, using a foreign documentary bill for purchase involves risk related to settling documents vs cash at maturity date – if differences arise due to discrepancies in quality/quantity/price stated on documents vs actual delivered products this may result in certain contract renegotiation terms being imposed by issuer bank/guarantor.

Yes - lending institutions are able provide funds based on documentary bills which act as collateral security over debt position created through import transaction.

Yes - depending on terms & conditions specified during origination process borrower may be granted right to early repayment without any penalty fee charged.

Common use cases include import transactions that involve large amounts of money generated from sale & purchase agreements across different countries.