Category: Letter of Credit

A LETTER OF CREDIT is a comprehensive international payment instrument that can reduce the risks faced by importers and exporters in the sale and purchase of cross-border goods, products and services.

A Letter of Credit (as Documentary Credit) is a written commitment to the beneficiary issued by the Guarantor (issuing bank) on request of an applicant guaranteeing the applicant’s fulfillment of certain obligations under the contract.

Categories
Letter of Credit

Key advantages for importers

  • Reduces the risks of international trade across the different countries
  • Lower cost 
  • Allows the importer to avoid the advance payment or reduce the amount of advance payment (improving cash flow)
  • To conduct the business in accordance with its plan while controlling all trade processes including the loading and transportation of goods
  • Assure importer’s credibility to the exporter side
  • The exporter can get payment as soon as the goods are shipped while the importer can pay after receiving the goods
  • The Importer can refuse to pay when required documents under the Letter of Credit are not in comply with the terms and conditions.
Categories
Letter of Credit

Export L/C fees and commission

EXPORT LC

Fees and commission
Advising of L/C

USD 20.00
Transfer of LC in favor of second beneficiary

USD 50.00
Advising of each amendment or cancellation

USD 10.00
LC confirmation

1% – 3% (min USD 150.00)
Document checking under LC by request of request of the client (each set)

USD 50.00
Receipt of documents and delivery to other banks (each set)

USD 25.00
Acceptance of draft

USD 50.00
Negotiation of LC at sight

0.7% (USD 350.00)
Discounting of deferred payment LC /forfeiting/

To be negotiated (min USD 350.00)
Transferring transferrable LC

USD 100.00
Inquiries by request of customer

USD 10.00
LC cancellation by request of the customer

USD 25.00
Categories
Letter of Credit

Key advantages for exporters

  • Reduce the risks of international trade across different countries
  • Lower cost 
  • The exporter will be able to secure payment of the goods by providing the documents that meet the terms and conditions as specified in the letter of credit.
  • Reduces production risk, if the importer terminates or changes their order
  • The exporter can obtain pre-financing from the bank after the goods are shipped until they receive payment (subject to post-payment terms) from the importer 
  •  The definite payment date allows the exporter to manage its cash flow effectively
  • Upon presentation of documents that comply with the terms of condition under the LC,  the importer will not be able to refuse the payment of the underlying goods
Categories
Letter of Credit

Import L/C fees and commission

IMPORT L/C

Fees and commission
LC risk premium (non-cash covered)

2% – 4% (annual)
Issuance of L/C

USD 100.00
Amendment to increase LC amount or extend LC

USD 30.00
Amendments to other LC conditions

USD 30.00
Checking of documents under an unconfirmed LC (each set)

USD 50.00
Receipt of LC cancellation request (upon consent of the other parties)

USD 30.00
Payment under LC

USD 25.00
LC confirmation by foreign bank

According to the foreign bank
Inquiries by request of customer

USD 10.00
Discrepancy charge to each set of documents

USD 50.00
Categories
Letter of Credit

Letter of Credit – Process flow