trust receipt definition

trust receipt

Asset based financing: Method used for funding purchase of inventories of consumer durables (appliances, automobiles), construction equipment, etc. In this arrangement the bank holds the title and the borrower can sell the goods (and thus repay the loan) but is obligated to keep them separate from the other inventory.

Documentary credit: Method whereby a bank allows an importer to take delivery of imported goods but retains the title to them. This arrangement allows the importer to acquire and sell goods without making payment under a letter of credit.

trust receipt is in the Banking, Commerce & Finance subject.

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