Letter of Credit Information
The Documentary Letter of Credit known as LC or DLC is a written undertaking given by a bank to the seller (beneficiary). The Letter of Credit or Documentary Credit is a technique for financing International trade by which a bank (issuing bank) takes the irrevocable commitment, at the request and for the account of its client (applicant), to pay the exporter (beneficiary) against the handing-over of various documents complying with the terms of the credit, proving forwarding and the nature of the goods stipulated in the pro-forma invoice or commercial contract within a set time limit.
The beneficiary of Letter of Credit may also obtain from their bank a credit line or packing credit to mobilize their export and their bank will receive the advance funding from the proceeds of Letter of Credit once they negotiate it.
Interbank Trading Africa L.L.C provides Irrevocable, Transferable Letter of Credit (MT-700) at Sight for importers who do not have enough cash flow or bank facilities to run their business.
Letter of Credit Procedure
1. Buyer submits requirement in terms of pro-forma invoice or buy and sell agreement of their trade deal to IBTA.
2. IBTA carries due diligence of their commercial transaction between buyer & seller and will inform the concerned parties about the approval or rejection of their LC application.
3. Once the LC application is approved then the buyer will provide certain documents and pay the LC issuance fee charges.
4. IBTA will immediately act and will provide from their bank account with European Bank the required LC or DLC on behalf of buyer & in favor of their supplier to conclude their trade deal.