Standby letter of credit (mt760)
What is a Standby Letter of Credit (SBLC)?
Standby letters of credit serve as independent assurances that mitigate payment risks for the beneficiary. Our Issuing Bank commits to paying the beneficiary upon receipt of a compliant claim, should the applicant fail to do so as per the agreement. This mechanism ensures smooth international trade transactions, particularly beneficial when dealing with varying trade laws and regulations between companies.
Standby letters of credit are commonly utilized in scenarios involving open account trade (where goods are shipped and delivered before payment), collections, and Documentary Credits (DCs). Our Issuing Bank provides standby letters of credit on behalf of the applicant, guaranteeing payment to the beneficiary in the event of applicant default.
STANDARD OPERATING PROCEDURE
Make an Application
Complete our application form to enable us gather all necessary information about the amount, recipient, and purpose of the bank guarantee.
Documentation Collection
We will guide you on the documentation needed, including valid identification and any additional paperwork required. We ensure that all documents meet the bank's requirements.
Sign our Document of Agreement
After collecting the necessary documents, we will provide you with a Document of Agreement (DOA) outlining the terms of our service. You will need to review and sign this agreement to proceed.
Payment Facilitation
We shall provide you with a designated bank account to pay the bank service charge into. We ensure that this fee is secured before proceeding with the application to the bank. This initial service fee will be deducted from the total fee amount.
Application Submission
We then submit the completed application and necessary documentation to the bank. Our established relationships with banks allow us to expedite this process efficiently.
Issuing Bank sends Swift MT to Beneficiary
The bank issues the standby letter of credit Swift MT760 electronically or as a physical document either through courier delivery or in person by a delivery agent to your address.
Confirmation and Fee Payment
After confirmation, the remaining fee is payable within 30 to 90 days. The initial service fee paid earlier will be deducted from the full fee amount. Our team is available for any follow-up questions or additional assistance you may need.