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Large transactions can be a challenge, but they can also be vital for the success of your business. We offer financing tools to suit your needs. Letter of Credit (LC) is a popular payment tool in international trade. With LC you will be able to overcome the obstacles in international trade and protect the interests of all parties to large transactions.

It works in this way: the parties provide the documents required under the terms of LC, and the bank issues an LC upon instruction of payer in favor of payee for making a payment as per agreed amount and terms.

Your money and your interests are protected.
No payment is made until receipt of documents required under LC.
Documents are checked by international standards.
Lower risks in case of first-time contracts with new sellers.

Ways of Collection

Revolving LC

Amount reusable without any additional arrangements.

Transferable LC

The beneficiary can request the bank to transfer part or all of the credit to another party or parties.

Back-to-back LC

A letter of credit issued in answer to another letter of credit.

Standby LC

Bank Guarantee, in the form of letter of credit, issued to cover possible risks of default.

Red/green clause LC

A type of LC including a special provision instructing the bank to pay an advance to the beneficiary prior to shipment.

FAQ

How is a letter of credit issued?

o To open a letter of credit, the client needs to deposit an agreed amount of money.

o A letter of credit is within the financing limit (line of credit) opened by the Bank for the client’s LC-backed transaction. For details see our line of credit page.

How long does it take for the Bank to review my application?

The Bank makes its decision within 10 (ten) business days upon receipt of the complete set of documents.

When can an application for a letter of credit be rejected?

Your application can be rejected, if the information and documents you provided are not trustworthy or complete.
Your application can also be rejected, if you have classified liabilities (including to third parties), etc

Which are the advantages of letter of credit for seller (beneficiary)?

Guaranteed payment, provided that all required documents are submitted in accordance with the terms of letter of credit.
As an obligation of issuing bank, letter of credit is dominant over buyer’s financial stability.
In case of confirmed letter of credit, there is additional payment assurance from confirming bank.

You can get acquainted with the full terms of the letter of credit here.

Updated on 06.12.2021 12:12