Letter of credit
Letter of credit is a generally accepted method of payment for foreign trade transactions and is a more flexible and secure form of payment that exists in many countries around the world. This form of settlement highly protects the interests of both the seller of the goods or services and the buyer.
Upon submission of a document on the transfer of the goods sent by the Seller to the ownership of the Buyer and the fulfillment of other required conditions, the Bank shall ensure that the payment is made to the Seller's account.
Advantages of a letter of credit for the buyer
- Elimination of the risk of losing cash
- Making payments after the seller fulfills its obligations under the contract
- Transfer of the shipped goods to the Buyer's ownership within the period and in accordance with other conditions specified in the letter of credit
Advantages of a letter of credit for the seller
- Guarantee of payment regardless of the buyer (if the obligations specified in the contract are fully fulfilled)
- Possibility of payment before delivery of the goods to the Buyer
- Ability to implement complex commercial contracts