Documentary and guarantee transactions
Do you need a guarantee or letter of credit?
Thanks to the evolved network of banks with which we have correspondence relationships, as well as expertise and long-lasting employee experience, we are able to provide the following services:
The guarantee is a security instrument for payment or performing contractual obligations by which the Bank guarantees that the guarantee principal will meet all obligations towards the beneficiary that are stated within it.
In our business, we issue and forward (send an advice note for) all types of bank guarantees:
1. Payable guarantees
- Payment guarantees
- Loan guarantees
2. Performance bond
- Advance payment return bonds
- Performance bonds
- Bid bonds
Elements of a guarantee and standard models of guarantee forms were taken from the publication of URDG, ICC 458, but they adapt to the specific requirements and needs of participants in the basic commercial transaction in accordance with our business policy.
We provide the following services regarding working with loro guarantees:
- Forwarding (sending advance notes for) loro guarantees according to the instructions of the guarantor bank,
- Checking the correctness of the contents of loro guarantees forwarded via the Bank with a SWIFT or directly to the guarantee beneficiary,
- Consultations when creating and forwarding protests (payment requests) according to loro guarantees.
A letter of credit is the safest instrument for paying for goods, services and other liabilities which provides maximum protection for both the importer/buyer and the exporter/seller, because it ensures payment by the bank of both trade payables and collection of trade receivables.
Nostro letter of credit
According to your order and for your account, in line with the received instructions, we open letters of credit based on deposit or with deferred deposit (not later than five days before the due date for payment towards the exporter/seller).
Our part of liabilities includes opening:
- Letters of credit payable on windows of our bank or on windows of other nominated banks,
- Letters of credit payable at sight, with a deferred deadline, with acceptance or negotiation,
- Non-transferrable, transferrable, revolving, stand by letters of credit,
- Unconfirmed letters of credit and letters of credit which require a confirmation by another bank.
By opening a letter of credit, we perform three basic functions:
- Payment (conditioned payment, because we perform payment of properly presented letters of credit according to the order and for the account of the importer/buyer),
- Insurance (we guarantee to the exporter/seller that, upon meeting the terms for the letter of credit, they will receive funds in the value of documents according to the goods delivered or service rendered),
- Loan approval (we approve a loan for the importer/buyer until the date agreed for payment.
Loro letter of credit
- Checking the correctness of the contents of loro letters of credit forwarded via the Bank
- Consultations regarding the preparation of the text of the loro letters of credit
- Forwarding (advice note) loro letters of credit (based on received instructions of the (international) bank issuing letters of credit)
- Forwarding letters of credit (according to instructions of the letter of credit beneficiary)
- Confirmation of letters of credit (according to instructions of the bank issuing letters of credit)
- Consultations regarding the fulfilment of the terms of letters of credit and document preparation
We also perform jobs that refer to the receipt of entrusted documents for collection, mediation regarding collection, as well as sending documents for collection. These are usually commercial, but also financial documents. To that end, we provide counselling services regarding working with international bills of exchange, their filling out, acceptance, etc.
Advantages of collection transactions are:
- Simpler and cheaper handling,
- Faster payment compared to "open" payment,
- Securities and documents on ownership over goods are delivered to the buyer with acceptance of bills of exchange or payment (CAD, D/A, D/P),
- Option of financing – discounting the accepted bill of exchange.
Foreign currency guarantees: