Letter of credit

Letter of credit

 

Letter of credit - an obligation of the Bank to pay for the goods / services provided to the seller on behalf of the customer. Payment is made after the seller submits to the Bank the documents confirming the implementation of the goods / services. If your company conducts international trade operations, the letters of credit issued by your Bank will help you in international settlements.

Your Bank offers you the following types of letters of credit:

- Irrevocable letter of credit;

- Stand-by letter of credit;

- Approved letter of credit;

- Unapproved letter of credit;

- Portable letter of credit;

- Back-to-back letter of credit;

- Subsequent funded letter of credit;

Your Bank offers you the following services under letters of credit:

- Opening, approval, notification and transfer of letters of credit;

- Provision of consulting services;

- Approval of letters of credit by correspondent banks;

- Opening of import letters of credit at the expense of customers' own funds;

- Opening of import letters of credit at the expense of the credit line provided by AFB Bank;

- Opening of term import letters of credit at the expense of the credit line provided by AFB Bank;

- Subsequent financing of Letters of Credit at the expense of AFB Bank and other financial institutions;

- Approval of letters of credit opened by other banks;

When obtaining a letter of credit, the buyer and seller have the following advantages:

Buyer's Advantages:

- Guarantee for payment of the goods after the seller fulfills his obligations under the contract;

- Guarantee to receive goods / services in accordance with the terms and conditions specified in the letter of credit;

- Solvency guarantee and demonstration of advanced financial instruments (opportunity to get a discount);

- Flexible approach to payment terms;

- Deferral of payment;

Seller's advantages:

- Guarantee of payment for goods and services regardless of the buyer (on the fact of compliance with all conditions of the letter of credit)

- Ability to receive payment sooner than delivery of the goods to the buyer;

- Guarantee to receive goods and services on the terms and within the period specified in the letter of credit;

- Ability to execute complex commercial contracts due to the flexible scheme of the letter of credit;