Letters of credit
Rabitabank suggests a wide range of banking services and products to its clients. The products suggested by our bank provide bonuses to the clients as well as facilitate their affairs and reduce concerns in the result. The following documentary operations offered by the bank are of that kind of services:
- Documentary letters of credit;
- Documentary payment collections;
- Bank guarantee.
Documentary letters of credit
Letters of credit are the safest form of settlements between clients. Concerns emerge between companies and organizations, seller and purchaser whether the parties are going to fulfill their obligations during sale and purchase operations, especially when they are conducting these operations for the first time. Conducting operations by letters of credit is the simplest and easiest solution in this case.
Letter of credit – is the banking service provided participation of bank as a mediator between two parties rendered services to each other. Letter of credit is conditional money obligation undertaken by the bank for making payment to the seller for the services rendered by the seller by order of the buyer. The bank will fulfill its obligations after submittal of official documents on implementation of all obligations (sending goods or rendering services to the buyer) by the seller to the bank. The bank may transfer payment authorities to another bank.
Documentary letters of credit offered by Rabitabank is the safest and most guaranteed form of settlements, especially international settlements. Settlements through letters of credit are conducted under control of banks and fully warranty observance of terms established by the agreements by all parties signed the agreements.
Advantages of letters of credit for buyers:
- seller will be provided payment guarantee only after fulfillment of its obligations;
- obtains guarantee regarding observance of terms and period mentioned in the letter of credit in rendering services;
- gets the opportunity to take advantage of greater experience of the bank in the field of sale and purchase and have discount;
- is granted deferment for making payment.
Advantages of letters of credit for sellers:
- is provided payment guarantee regarding goods supplied/services rendered irrespective of solvency of buyer;
- gets the opportunity to receive payment before sending goods if stipulated by the agreement;
- gets the opportunity to carry out complicated commercial agreements owing to the prompt scheme of letters of credit.
Rabitabank renders the following services on letters of credit:
- Opening, approval, advise and transfer of letters of credits, conducting other operations regarding settlements by letters of credit (change of terms, check of documents, making payment);
- Consulting services while working with documentary letters of credit;
- Approval of letters of credit by famous correspondent banks;
- Opening import letters of credit at the expense of clients.
Rate scale on letters of credit
|1.||Opening letter of credit||0.5% (min. USD 100)|
|2.||Advising of letter of credit in advance||0.1% (min. USD 50)|
|3.||Advising of letter of credit||0.1% (min. USD 50)|
|4.||Approval of letter of credit||under agreement, provided that it will not be less than monthly 0.2% (min. USD 100)
0.3% (min. USD 20)
|5.||Payment||max. USD 500|
|6.||Change or cancellation of terms (approval and increase of amount are excluded)||USD 50|
|7.||Increase of amount of letter of credit||(out of the amount increased) 0.2% (min. USD 50)|
|8.||Receiving and check of documents||0.1% (min. USD 50)|
|9.||Commission fee for discrepancies in the documents received||USD 50|
|10.||Transfer of letter of credit||0.1% (min USD 100)|
Documentary payment collections
Documentary payment collections – is an order made by the seller to its bank regarding receiving payment for transportation of goods and other services carried out in favor of buyer and transfer of the amount to the seller’s account. The seller submits documents together with collection order to the bank after discharge of goods at the place of destination. The bank submits the documents to the buyer via the buyer’s bank after payment of the amount mentioned in the collection order.
Rate scale on the documentary payment collections operations in Rabitabank:
|1.||Receiving documents for the purpose of payment collection||0.3% (min. USD 50)|
|2.||0.3% (min. USD 50)Delivery of documents against payment or acceptance (for both import and export operations)||0.3% (min. USD 50)|
|3.||Delivery of non-payment documents and return of unpaid documents||0.1% (min. USD 50)|
|4.|| Change of terms /cancellation of collection order