Standby Letter Of Credit Service

A guarantee issued by a bank or a financial institution to pay a beneficiary on a client’s behalf in a situation where the applicant defaults, is known as a standby letter of credit. This was developed as a consequence of legal limitation put by the US regulator on the bank’s authority for issuing guarantees.

A standby letter of credit is considered quite suitable for a wide range of secure payments making it quite a flexible tool. Most commonly, it is used for international trade purposes for providing assurance to the party that it will receive the payment whatever the case it. Having said this, there are quite a few complexities involved in a standby letter of credit. This suggests that it is necessary to have a consultation with an expert in case complete information is not available regarding the procedure.

There are certain types of a standby letter of credit which are mentioned below:

• A direct-pay standby
• A performance standby
• A bid-bond or tender-bond standby
• An advance-payment standby
• A financial standby
• A counter standby
• A commercial standby
• An insurance standby

ISSUERS FOR SBLC

• BANCO Micro Capital
• Acumen Bank
• United Trust Bank
• UOB Global Capital Finance

PROCEDURE

Issuance Procedure:

We need the following documents/ information for finalising the draft –

• Filled in application form
• Verbiage required in the instrument for SBLC & BG / Pro-Forma Invoice for DLC
• Trade license of your company
• Share Holders List
• Passport copy of main applicant
• Last Three years audited balance sheet
• Last Six months latest bank statements

Step-wise

• After acquiring all the pertinent documents and information, we will select the issuing bank or financial institution and provide the draft for your review.
• Upon receiving the draft of the instrument, you must thoroughly review it with all concerned parties. Should there be any amendment, we can revise it accordingly subject to issuer bank’s policy. Once the draft is approved, send us a copy of the draft with signature and approval stamp.
• We will raise the invoice for the agreed charges and you will make the payment against the invoice.
• As soon as we receive the payment for the invoice, the issuer will issue and relay the instrument after documentation is completed.
• Simultaneously, we will send you the issued copy through email for your reference and record.