If you are engaged in activities (including trade), where you need to quickly procure imported goods and have no foreign currency cash, then L/C opening transaction in our Bank is just for you!
A letter of credit is a monetary obligation of a bank, accepted on the basis of an order from the applicant (customer-buyer) to make a payment for an amount determined between the parties in an agreed currency in favor of a beneficiary (seller) after submitting documents provided for by the terms of the letter of credit within the prescribed period.
Documentary L/C transaction contributes to the expansion of foreign trade operations of clients, increase in cash flows, development and strengthening of trust relations with foreign partners and their banks.
Basic terms of the transaction:
- Validity period - no more than 360 days;
- Interest rate - by agreement;
- One-time management fee – according to the bank's tariffs;
- Grace period for repayment of the transaction is no more than 9 months from L/C opening date;
- Early repayment of L/C is allowed, fines and commissions for early repayment are not collected.
- Collateral - real estate, motor transport, deposits, special equipment and other liquid property in accordance with the Legislation;
- Mixed collateral is applicacle;
- Collateral is accepted for a total amount of 125% of the amount of a letter of credit with a discount. Discount size depends on a type of property, its value;
- Other transaction costs - according to tariffs of a foreign bank
This financial transaction provides a number of advantages, such as:
- international legal reliability in a form of a payment instrument;
- a means of high-quality short-term financing;
- possibility of operational settlements with foreign suppliers;
- individuality in determining conditions for provision of services and organization of cooperation;
- guarantees of solvency and mutual settlements between the parties within under the concluded transaction;
- protection against a risk of non-payment by an applicant (buyer) in favor of a beneficiary (seller)
How to open a documentary L/C: