Letter of Credit
1. Opening procedure
- L/C service can be opened at the bank only after opening a corporate account with a Singaporean bank.
- The opening procedure occurs between the importers (L/C issuers), exporters (beneficiaries), opening banks and purchasing banks
- Contract (L/C issue agreement) - Application for opening (application submission) - Deposit of mortgage - Open (open and forward of L/C)
2. Function and effect of L/C
- Function
- Means of Settlement
- Credit Facility
- Beneficiary
- Guaranteed collection of the price of exports with bank commitment, immediate collection of the price of exports after shipment, and benefits from the trade loan.
- Applicant
- Credit payment, guarantee of clear conditions, and predictions of shipments and arrival times of goods
3. Transaction Procedure
- Conclusion of Contract
- Application for opening L/C
- Opening and sending L/C
- Notice of L/V arrival
- Shipping
- Apply for purchase after issuing the bill of exchange
- Payment
- Send the bill of exchange and shipping documents
- Notice of shipment document arrival
- Bill of exchange payment
- Collect on delivery payment
