Coal India Limited (CIL) has relaxed its payment terms for supplying fuel to its smaller customers by making a letter of credit (L/C) facility available to them.

The main benefit for CIL's smaller customers is that they will not now need to make 100 per cent advance payments for coal.

New customers

The L/C facility will be available to state-run CIL's customers in the steel, sponge iron, cement and aluminium sectors.

The facility may also be tapped by microenterprises, small- and medium-sized enterprises and independent power plants.

L/C terms

The L/C facility is being extended to smaller customers, "allowing them to pay coal value through irrevocable revolving L/C mode for supplies through rail mode under fuel supply agreements executed through linkage auctions" according to a CIL statement.

Previously this facility was available only to power generating companies.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.