Documentary Letter of Credit

A documentary letter of credit is a guarantee that provides assurance to the beneficiary that he will get the payment that has been mentioned in the documentary letter of credit. There is a condition that the compliant presentation should be under the documentary letter of credit. This documentary letter of credit is commonly used for international transactions where both the buyer and the supplier have a new relationship and operate

from different countries.

A documentary letter of credit is a really crucial financial instrument for meeting short-term needs. It enables

the recipients to obtain the important credit for financing the project. The recipients hope to get a sufficient

return to settle the due amount within the provided time frame.

The documentary letter of credit showcases the documents and information that are needed by the beneficiary

on presentation, which includes the expiry information like the date and time of the letter. The compliant

presentation is a kind of guarantee given to the beneficiary by the documentary letter of credit in order to get

paid. The only criterion is that the delivery conditions should be met.

It is the responsibility of the bank that writes the letter of credit on the applicant’s behalf to ensure that the

terms and conditions that are required for documentation purposes under the credit are duly met before any

amount is paid to the supplier. Documentary letters of credit come under the governance of the International

Chamber of Commerce (ICC) rules. These rules for the letter of credit are known as Uniform Customs and

Practice for Documentary Credit (UCP). The current version which is in effect is the UCP600 from July 1st,

2007. The concerned parties to a documentary letter of credit are the issuing bank and the beneficiary.

In these cases, the creditworthiness of the issuer stands in place of the creditworthiness of the buyer – giving

the supplier greater comfort that he will be paid.

Issuers for USANCE LC

Calls for limits and restrictions. Please ask for each bank restrictions and line limits:

1. BANCO Micro Capital
2. Union Banco Credit
3. UOB Global Capital Finance

ProCEDURE

Issuance Procedure

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

1. Filled in application form
2. Verbiage required in the instrument for SBLC & BG / Pro-Forma Invoice for DLC
3. Trade license of your company
4. Share Holders List
5. A passport copy of the main applicant
6. Last Three year’s audited balance sheet
7. Last Six month’s latest bank statements

Step-wise

1. After acquiring all the pertinent documents and information, we will select the issuing bank or
2. financial institution and provide the draft for your review.

1. Upon receiving the draft of the instrument, you must thoroughly review it with all concerned
2. parties. Should there be any amendments, we can revise it accordingly, subject to the issuer bank’s
3. policy. Once the draft is approved, send us a copy of the draft with your signature and approval
4. stamp.

1. We will then raise the invoice for the agreed charges, and you will make the payment against the invoice.

1. As soon as we receive the payment for the invoice, the issuer will proceed to issue and relay the
2. instrument once all documentation is completed.
3. 
   
4. Simultaneously, we will send you the issued copy via email for your reference and records.

Note: The charges will depend on the value of the Financial Instrument, Tenure, and Issuing Bank / Financial Institution.

Request application forms via email.