Letter of Credit
A Letter of Credit, simply defined, is a written instrument issued by a bank at the request of its customer,the Importer (Buyer), whereby the bank promises to pay the Exporter (Beneficiary) for goods or services,provided that the Exporter presents all documents called for, exactly as stipulated in the Letter of Credit,and meet all other terms and conditions set out in the letter of Credit. A Letter of Credit is also commonlyreferred to as a Documentary Credit.A "Letter of Credit" is used as an instrument for settlement of payment arising out of commercialtransactions like sales/purchases in national/international trade. We issue every types of LC as per therequirement of our customers. The common types are as under:
Differed/Mixed Payment LC
Back to Back LC
Advance Payment LC
Documents required for issuing a Letter of Credit-
Before issuing a LC, you will require to have approved credit limits sanctioned by the bank. Moreover,imports and exports transactions that involve foreign currencies are subject to Central Bank (NRB)'sforeign exchange regulations and other International rules like UCPDC 600, URR etc. We will require youto submit the following documents along with the LC Application form for issuing a Letter of Credit:
Proforma Invoice/Sales contract/Indent containing at least-
Harmonic code (in eight digits) of the goods to be imported,
Country of Origin
Delivery and Payment terms and various other details like rate, quantity, total value,shipment country etc. (wherever applicable)
Bi.Bi.Ni. Form No. 3 (Mandatory as per NRB)
Other documents required are-
Firm/Company Registration Certificate
Board minute (if applicable)
There are various other NRB provisions regarding import/export of goods from India and other thirdcountries. We will help you to know these provisions so as to make you feel at ease while conductingimport/export business.
Banks guarantees are written obligations of the issuing bank (MBNL) to pay a sum on to a beneficiary onbehalf of its customers in the event that the customers themselves do not pay the beneficiary. Throughsuch guarantee letters, MBNL undertakes responsibilities to provide fund (guarantee amount), following adefault by you of your contractual or other obligations.
Letters of Guarantee can be in the form of Bank Guarantees, Performance Bonds, Bid Bonds, ShippingGuarantees, Advance Payment Guarantees, Counter uarantees etc.