Conduct your business with confidence globally, even where you do not have established relationships, through the use of bank guarantees and standby letter of credit.

Negotiate favorable terms and conditions with buyers and suppliers by protecting them from contractual non-performance while addressing your financial needs.

Letters of credit are the safest and often most convenient means of financing trade and related transactions. A Letter of Credit is a written undertaking given by a bank (Issuing Bank) to a beneficiary from an applicant (Issuing Bank’s client) to pay the beneficiary at sight, or at an agreed future date, a stated amount within a defined time period. Which is however conditional upon the beneficiary’s documentary compliance with the terms and conditions in the Letter of credit.

With our Standby letters of credit, in markets where your suppliers and buyers are not very comfortable with guarantees, our A-rated banks can support your business via both financial and non-financial standby letters of credit.

Though these two instruments are different yet similar in nature, both are promises from a financial institution that a borrower will be able to repay a debt to another party, no matter what the borrower’s financial circumstances, they assure the third party that if the borrowing party cannot repay what it owes, the financial institution will perform on behalf of the borrower. Both serve to reduce risk factors, encouraging the transaction to proceed and close successfully. But they however work in slightly different ways and in different situations.

While letters of credit are especially used in international trade due to the distance involved, the potentially differing laws in the countries of the trade/business involved, and the difficulty of the parties meeting in person. Hence, letter of credit are primarily used in global transactions while bank guarantees are usually used in real estate contracts and infrastructure projects.