What is a documentary letter of credit?
A letter of credit is a written commitment of the importer's bank to pay a specific amount of money to an indicated beneficiary (exporter) at an agreed time. The condition for the payment is a delivery by the exporter of appropriate transport documents confirming the performance of a contract. The date of documents submission is at the same time the validity date of the letter of credit. The letter of credit is issued after a relevant instruction is received from the customer and after the customer establishes a liquid payment collateral.
Find out how a letter of credit works!
Is letter of credit perfect for your business?
If you are in the trade or service business and often establish new trade contacts, a letter of credit will be the perfect solution for you. It will secure transactions with partners whose credibility may not be confirmed and also when your relations with the existing partners have deteriorated. The letter of credit is also a good protective instrument for your business when the political or economic situation of the partner's country is far from stable.
Contact your Credit Advisor who will provide you with detailed information about the offer and documents required, and help you prepare a relevant import letter of credit instruction.
What types of letters of credit do we offer?
- import LC - as an importer, you instruct us to issue a letter of credit and we, in line with your instructions, undertake to pay a specified amount to the beneficiary (foreign exporter) when he has met the conditions stipulated in the LC agreement. The conditions of LC payment, including a list of documents required, are included in the LC agreement.
- export LC - acting in line with instructions delivered by the foreign exporter's bank, we advise you of the LC and its conditions. Upon a request of the foreign bank, we may confirm the letter of credit, i.e. agree for full financial exposure. We also examine the required documents you have delivered and inform you if anything is missing.