Letters of credit

Documentary letter of credit is the obligation of the bank, which has opened the letter of credit, to make payment for the benefit of the addressee of the letter of credit (exporter) under condition of granting by the latter of the documents, specified in the conditions of the letter of credit, during the period of action of the letter of credit. The term of payment depends on conditions of the letter of credit.

Using payment by a letter of credit in settlements the bank guarantees to the exporter payment by the buyer of dispatched production after giving the properly made out documents, which are specified in the letter of credit and confirm dispatch of the goods or performance of work by the time fixed. In its turn the buyer receives guarantees that the payment will be made only in case the documents, given by the seller, meet the requirements of the letter of credit.

The list of the documents, which are necessary in most cases for payment of the letter of credit:

• dispatch documents (bill of lading, rail consignment note, CMR, air consignment note);
• account;
• insurance certificate/policy;
• certificate of origin;
• certificate of quality;
• specification/packing sheet/weight sheet.

The list of documents is coordinated between the participants of the foreign trade operation at the stage of signing of the contract or later.

Financing of international trade

Opening of the letter of credit or granting of guarantee without granting of covering is considered by the Bank as a credit operation, referred to financing of international trade. The bank offers services in financing of a delay of payment for imported production for the term of up to 365 days. Financing of import operations with letters of credit and guarantees allows to reduce cost of financing and series of additional benefits in control and organization of import delivery.

"Megabank" PLC holds the action:

the enterprises, which place money on deposit (in the sum of not less than the equivalent of 100,0 thousand USD), will receive the discount at the rate of up to 50% from the cost of the basic rates on documentary operations.

The Department of Documentary Operations and Currency Control
30 Artema, room 306, Kharkiv, 61002
tel. (057) 714-07-03, 714-33-64.
E-mail: ft@megabank.net