Documentary Letter of Credit
A documentary letter of credit is a form of settlement that protects the interests of both the seller and the buyer.
A documentary letter of credit offers the following benefits:
- For the buyer
A guarantee that funds will be transferred to the seller only if the purchased goods meet the contractually agreed criteria
- For the seller
Risk of non-payment is reduced, because a letter of credit constitutes an obligation for the bank − rather than the buyer − to effect a payment if goods received by the Buyer meet the contractually agreed criteria. Forwarding documents are made available to the buyer only after the payment has been effected
Depending on your collateral, we offer the following letters of credit:
- Covered letter of credit – is secured with funds lodged by the customer in an escrow account
- Uncovered letter of credit – is offered within the framework of the customer’s credit limit.
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