A letter of credit is the bank's obligation to pay the amount specified in the contract on behalf of the Buyer to the Seller within an established time period, provided that the Seller has fulfilled the conditions of the letter of credit and submitted the documents specified in the text of the letter of credit.
Conditions:
- Amount: from 100 to 5,000,000 AZN (letter of credit is issued in USD / EURO equivalent)
- Duration: up to 12 months
- Commission: varies depending on the entrepreneur's use of other bank products
The main advantages of opening a letter of credit in Bank Respublika:
- Letter of credit costs are lower than the costs of the loan
- Prompt approval of the letter of credit
- Issue of a letter of credit with the approval of the world's leading banks (including Commerzbank, Raiffeisen Bank International, and others)
- Opportunity to use the experience of bank employees in preparing payment terms for trade agreements
- Individual approach to customers
- Effective interaction with foreign banks and other contract partners
- Ability to open letters of credit faster as a result of direct relations with foreign banks
- Ability to sell goods at a profit until the date of payment, with extended payment terms
The advantages of a letter of credit for a Seller:
- The elimination of risks associated with legislation and political instability in foreign countries
- Letter of credit allows the Seller to offer a loan to the import partner and, as a result, this increases the Seller's turnover
- Letter of credit cannot be returned, so payment obligation cannot be canceled or changed
- Ability to receive payment prior to delivery of the goods to the Buyer
- Guarantee to receive payment on the terms and within the period specified in the letter of credit
- Ability to execute complex commercial contracts due to the flexible schedule of a letter of credit
The advantages of a letter of credit for a Buyer:
- Option not to pay in advance for ordered goods
- Opportunity to get extended payment terms when opening a letter of credit
- Opportunity to sell goods at a profit until the date of payment, with extended payment terms
- Transfer of funds to the exporter's account is affected only after the exporter fulfills all the conditions of the letter of credit, submits the documents specified in the text of the letter of credit to his bank, and these documents are checked by authorized bank specialists
- Payment by letter of credit provides additional assurance to the Buyer's foreign counter-parties concerning solvency
- Guarantee to purchase goods in accordance with the terms and within the period specified in the letter of credit
Bank Respublika offers the following types of letters of credit to its customers:
- Geri çağırılmayan akkreditiv (Irrevocable LC)
- Təsdiqli akkreditiv (Confirmed LC)
- Təsdiqsiz akkreditiv (Unconfirmed LC)
- Rezerv akkreditivi (Standby LC).
- Tələbli akkreditiv (Payment at Sight LC)
- Ödəniş vaxtı təxirə salınan akkreditiv (Deferred Payment LC)
