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Reduces the risk of unilateral cancellation of the contract within the time limit of the letter of credit
If you are an exporter, you are looking for assurance that you will receive the agreed payment for your delivery.
If you are an importer, you want to make sure you receive the goods you pay for.
The Documentary Letter of Credit provides protection for both parties to a commercial transaction - the buyer’s bank (Ordering party of the letter of credit) is obliged to pay to the seller (Beneficiary under the letter of credit) the agreed amount if the seller presents the documents provided in the letter of credit within the set deadlines.
Therefore the Documentary Letter of Credit is a widespread and reliable form of payment.
Important: In these operations, banks only check the documents and do not express an opinion on the goods/services to which these documents refer.
There are various forms of documentary letters of credit – payable at sight or with deferred payment, confirmed or unconfirmed, and so on. The Bank carries out all types of operations related to the documentary letters of credit in all major currencies. There is no universal type of letter of credit.
Talk to us about your needs. KBC Bank can professionally advise you on the form of documentary letter of credit that is best suited to you.
Export Documentary letter of credit (Export letter of credit)
The Documentary Export letter of credit received by KBC Bank represents an irrevocable commitment of the Bank to the Buyer (Issuing Bank) for payment of a certain amount of money for the benefit of the Seller (Beneficiary under the letter of credit) when the Beneficiary submits the documents agreed upon in the letter of credit in strict accordance with the terms and conditions provided therein.
The Documentary Letter of Credit is received at the seller’s bank (Advising Bank)
Import Documentary letter of credit (Import letter of credit)
KBC Bank issues letters of credit as ordered by its clients against blocked cash or approved credit limits.
By applying international rules and standards (e.g. UCP 600)
Advantages for the buyer
The issuing bank will pay the seller only if the documents are in full compliance with the terms of the letter of credit and are presented within the time limit specified in the letter of credit.
Advantages for the seller
Even in the event of insolvency and unfairness of the counterparty.
Discounting of receivables under letters of credit.
You can order the issue of a documentary letter of credit by:
Your application for the issue of a letter of credit will be reviewed in accordance with the Bulgarian law and KBC Bank’s internal rules.
The bank and the ordering party may not cancel a letter of credit after notification to the Beneficiary. The letter of credit may be cancelled or amended only with the Beneficiary's consent. KBC Bank undertakes to make payments only under irrevocable letters of credit.
By including in the required documents such ones that could prove good performance of the seller’s obligations.
Through an irrevocable commitment of a bank - the payment is not subject to the creditworthiness of the buyer and the payment will be received after submission of documents that meet strictly the conditions of the letter of credit.
The payment under the letter of credit shall take place only if the buyer gives his consent to accept the submitted non-compliant documents.
In these operations, banks only check the documents and do not express an opinion on the goods/services to which these documents refer.
A letter of credit is an independent and separate commitment from a commercial contract.
Yes, KBC Bank makes a preliminary review of the documents for which it collects a fee based on the current tariff of the Bank.
The confirmation of a letter of credit is a separate and independent commitment of the confirming bank in addition to that of the issuing bank and means that the confirming bank has to make a payment according to the conditions of the letter of credit when it receives regular documents in case the issuing bank does not fulfil the commitment. KBC Bank adds its confirmation to letters of credit at its own discretion and subject to certain conditions if requested by the issuing bank and/or if requested by the Beneficiary against a current fee set by the Bank.