Documentary letter of credit
A Documentary Letter of Credit (LC) is a written undertaking given by a bank on behalf of an a Client (Importer) to pay the Beneficiary a given sum of money, providing that the Exporter presents documents which comply with the terms laid down in the Letter of Credit.
Regardless of type of registration, LC is intended to legal entities dealing with the activities of export and import, as well as to other companies and entities needing this payment instrument, and, also, having an account open at ProCredit Bank.
A documentary letter of credit as a payment instrument provides security to all the parties involved in the international payment transactions:
- Buyer is confident that the payment against the Documentary Letter of Credit will be performed only in case when Seller, within the timelines provided, has submitted all the required documents related to the Letter of Credit.
- Seller is confident that, by submitting of orderly dispatching and commercial documents noted in Letter of Credit, provided that all the requirements laid down under the Letter of Credit have been met, they will be able to charge the counter-value of the exported goods, i.e. service rendered, since the payment is guaranteed by the bank that has opened Letter of Credit and/or confirmed Letter of Credit.
Prior to issuing of Letter of Credit, Buyer and Seller should agree on the following:
- Conditions referring to payments of the Documentary Letter of Credit, as well as transportation clause
- Type of documentary Letter of Credit, as well as documents to be presented (invoice, packing list, transportation document, certificate of origin, etc)
- Issuance and expiry dates of Documentary Letter of Credit
We offer the following types of Documentary Letter of Credit:
- Irrevocable Documentary Letter of Credit
- Non-transferable Documentary Letter of Credit
- Non-confirmed Documentary Letter of Credit
- Confirmed Documentary Letter of Credit
- Documentary LC payable at sight
- Deferred payment Documentary LC, etc.