The Import Letter of Credit process begins when an importer and an exporter agree to use a Letter of Credit as the method of payment for the shipment of merchandise. The importer requests that the Bank issue a Letter of Credit on its behalf.
Once it approves the letter of credit, the transaction is documented with an Application and Agreement for Commercial Letter of Credit.
The Bank issues the Letter of Credit and forwards it to a correspondent bank located in the exporter’s city. The exporter is then advised by that bank (referred to as the “Advising Bank”) that the credit is received, and the exporter ships the goods based on this advice.
The Issuing Bank enters into a contract with the foreign exporter, the beneficiary of the Letter of Credit, whereby it substitutes its credit and reputation for that of an importer.
To receive payment under a commercial letter of credit, the exporter must present a draft along with the documents required in the Letter of Credit. The draft may be a Sight Draft or a Usance (time) Draft. The type of draft drawn by the exporter is determined by the importer, the seller, and the bank before the Letter of Credit is issued.
The Bank is ready to handle your Letter of Credit needs. We issue Letters of Credit within 24 hours from the time of approval of the application. There are over 1,000 correspondent banks around the world that can act as an Advising Bank.