Letters of Credit
Letters of Credit
A Letter of Credit (LC) is an irrevocable undertaking by a Bank on behalf of its Customer/Buyer for payment to Seller/Supplier/Exporter, as per tenor of LC, provided the required documents are presented in conformity with LC terms. This method protects the Buyer, since no payment obligation arises until the documents proving that the goods have been shipped or delivered as proposed are presented.
Type of Facility - Sight/Usance/Revolving
Features and Benefits
- Governed under UCP 600
- Irrevocable- the terms and conditions cannot be changed without the agreement of all the parties (Buyer and Seller)
- Deals in documents, not goods
- Negotiability- facilitates Supplier/Beneficiary to raise credit
- Empowers to transact with unknown partners in new geographical areas
- customizing trade terms and conditions
- Demonstration of Solvency of Buyer
- No Requirement of payment
- No payment till availability of required documents
- Can avail deferred payment terms from seller
- Reduction in Risk of Non-payment
- Assured of payment on compliance of LC terms
- Can raise finance
- All forms of legal entities engaged in trading, manufacturing or other productive economic activities with sanctioned credit limits. Please contact Bank for credit facilities.
- Trade License
- Copy of Proforma Invoice/Purchase Order, if any.
- Insurance Policy for adequate amount with Bank’s Name
- Modest collateral requirements.
Terms & Conditions apply
Letter of Guarantee
A Letter of Guarantee is an irrevocable undertaking by a Bank to pay a specified amount of money to a beneficiary.
Bill Discounting is a product for Short Term Working Capital finance, designed to bridge Working Capital needs.
NBQ’s Institutional Banking Division maintains good working relationships with international banks and institutions all over the world.