What is availisation?

What is availisation in trade terms?

Avalization is the co acceptance of usance export non DC bills by the Drawee bank ( importers bank ). Just in the case of export DC's where exporter's bank discount bills after acceptance from the issuing bank, in Avalization exporter's bank can discount non DC bills after the drawee bank ( importer bank ) has given their co acceptance. The difference here is that the drawee bank is just not giving an acceptance on behalf of the customer , but is co accepting the bills ( which means even in the event of the importer not paying, the drawee bank will pay to the exporter's bank ) For avalization to work, the exporter has to get in touch with the importer and get his buy in for the transaction. Only after the importer buy in is got will the drawee bank co accept the bill. The drawee bank actually earmarks the import limit of the buyer while avalizing the bills and this essentially will only work for importers who have existing import facilities with their banks.