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Letter of Credit

A Letter of Credit is a contractual commitment by the foreign buyer’s bank to pay once the exporter ships the goods and presents the required documentation to the exporter’s bank as proof.

As a trade finance tool, Letters of Credit are designed to protect both exporters and importers. They can help you win business with new clients in foreign markets. This means the exporter gets a guarantee of payment while offering the importer reasonable payment terms.

How to Apply for a Letter of Credit

  • The exporter and their bank must be satisfied with the creditworthiness of the importer’s bank. Once the Sales Agreement is completed, the importer applies to their bank to open a Letter of Credit in favor of the exporter.
  • The Importer’s bank drafts the Letter of Credit using the Sales Agreement terms and conditions and transmits it to the exporter’s bank. The exporter’s bank reviews and approves the Letter of Credit and sends it to the exporter.
  • The exporter ships the goods in the manner provided for in the letter of credit and submits the required documents to their bank. A freight forwarder may be used to assist in this process.
  • The Exporter’s bank checks the documents for compliance with the Letter of Credit terms and conditions. Any document errors and discrepancies must be amended and resubmitted. After approval, the exporter’s bank submits the complying documents to the importer’s bank.
  • The importer’s bank releases payment to the exporter’s bank. The importer’s account is and their bank releases the documents to the importer to claim the goods and clear customs.

Types of letters of credit we arrange:

  • Irrevocable LC
  • Revocable LC
  • Standby letter of credit
  • Confirmed LC
  • Transferable LC
  • Payment at sight LC
  • Back-to-back LC
  • Usance LC – 30/60/90 days
  • Deferred payment LC
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Bank Guarantee

We offer different types of guarantees as we have tie ups with different banking and non-banking financial institutions locally and globally. We arrange guarantees for different purposes to be served by our clients.

Types of Guarantees we offer are:

  • Bid/ Tender Guarantee: This guarantee plays a role of security in those cases when the Company fails to perform its obligations to tender organization or other party that is stipulated in the order received by winning the tender.
  • Advance Payment Guarantee: This guarantee represents an obligation of the bank to return advance payment if, after receiving an advance, the Seller does not perform its contractual obligations.
  • Financial Guarantee: A financial guarantee is a type of promise given by a guarantor to take responsibility for the borrower in the case of default in payments to the lender or investor. Generally, insurance companies give guarantee to back the debt of large corporations (the borrower) in payments to the market (the lender).
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Stand by Letter of Credit

Stand by letter of credit is a legal document which is basically used as a commitment by the bank for payment to the seller if buyer defaults on the agreement. So basically, it acts as a security for the seller from buyer’s side before establishing business relation.

We offer stand by letters of credit from different banks and banking institutions all over the world.

We have catered to many of our international clients with the same and they have successfully executed their desirable business activities.

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