Letter of Credit

1. Opening procedure

  • L/C service can open at the bank only after opening a corporate account of Singapore Bank.
  • It works between the importer (L/C Issuer), exporters (beneficiary), opening banks and purchasing bank
  • 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
    • Guarantee collection of the price for exports with bank commitment, immediate collection of the price for exports after shipment, and benefit from the trade loan.
  • Applicant
    • Credit payment, guarantee of clear conditions, and predict the shipment and arrival time 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