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Letters of credit

Documentary letter of credit is a form of cooperation between the Buyer and the Seller, in which the bank acts as an intermediary. It undertakes to pay the amount in favor of the Seller, but only after he fulfills certain conditions. The amount and term of the transfer of funds is determined by a contract. This form of interaction, like other bank guarantees, serves as a flexible and reliable payment tool that can be applied in the territory of Ukraine and in international settlements.

Types of Letters of Credit

MTB Bank clients can use the following types of letters of credit:

  1. Secured. In this case, it is necessary to open a separate account with the issuing bank, which will block the cash cover necessary for making the payment.
  2. Unsecured. In this case, the bank’s obligations are secured by a different cover that differs from the usual cash cover.
  3. Confirmed. Here, in addition to the issuer, another bank is used, which confirms the contract. It is liable for payment in relation to the Seller.
  4. Unconfirmed. In this case, only the issuing bank is used.
  5. Transferable. This type is applicable if the Seller acts as an intermediary. By its order, the bank, which received and opened a letter of credit in favor of the Seller, transfers the obligations in favor of the Supplier of goods.
  6. Stand-by. Here, the issuer transfers payments in favor of the client only in case of non-fulfillment of contractual obligations.

Benefits of the Service 

The advantages of letters of credit from MTB Bank are:

Conditions

The conclusion of the contract is a prerequisite for the provision of services. It is necessary to determine the procedure for issuing a letter of credit, the term and amount of payment, and the liability of the parties. In addition, MTB specialists act in accordance with Version No. 600 of the Unified Rules and Customs for Documentary Letters of Credit.

For advice on letters of credit, bill of exchange transactions and other services, please call by the phone number indicated.

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