Introduction: Confirmation of L/C is that the first payment obligations undertaken severally by countries bank for the beneficiary on the way aspect the problem Business Consultants. A second guarantee, in addition to a letter of credit, that commits to expense of the letter of credit. A confirmed letter of credit is typically used once the availability organization of the letter of credit may have questionable trustworthiness and thus the trafficker seeks to induce a second guarantee to assure payment.
Functions: Enterprise the credit risks of the problem bank for the exporter so on facilitate exporter receive payments before upon obliging presentation; it are usually divided into a pair of forms: open confirmation and silent confirmation.
Features: Reduction of risks and acceleration of the capital turnover: Confirmation of L/C can facilitate exporters stop the risks from the problem bank, the country risk of issue company and conjointly the exchange management risks. Double guarantee: except the conditional payment enterprise created by the problem bank, the exporters can get further conditional payment enterprise from business consultants, swing the exporters below double payment guarantee. Payment guarantee: The exporter upon that matches the LC Confirmation wants and approval of the firm can gain the non-recourse payments or payments guarantees.
Charges Target Customer: Two percent of the confirmed amount, with minimum of charged quarterly. The fee will rise subject to the degree of risks of the relevant countries. Exporters would love to induce payment confirmation from a bank with the exception of the problem; Exporters would love to induce non-recourse funds once presentation of documents yet the problem includes a smart credit standing.
Process: Banks provides revolt upon the request of the problem beneficiary once advising the LC; LC Confirmation the exporter presents the obliging documents to Bank makes non-recourse payments or irreversible payments guarantees to the exporter once examination and approval; organization mails the documents to the foreign issue bank to mention compensation and might ensure the payment once the foreign payment received.
When a Letter of Credit (LC) is issued, the LC issue consultancy sends the LC either to its branch workplace or correspondent bank that is often set within the seller's (beneficiary) country. The branch workplace or correspondent bank that receives the LC is understood because the Advising Bank. The seller can request the buyer to specify his own banker as the Advising Bank. However, if the seller's bank does not maintain correspondence relationship with the Issuing Bank, the Issuing Bank may appoint another bank as the Advising Bank, which may in turn utilizes the service of the seller's bank as the second Advising Bank.
Functions: Enterprise the credit risks of the problem bank for the exporter so on facilitate exporter receive payments before upon obliging presentation; it are usually divided into a pair of forms: open confirmation and silent confirmation.
Features: Reduction of risks and acceleration of the capital turnover: Confirmation of L/C can facilitate exporters stop the risks from the problem bank, the country risk of issue company and conjointly the exchange management risks. Double guarantee: except the conditional payment enterprise created by the problem bank, the exporters can get further conditional payment enterprise from business consultants, swing the exporters below double payment guarantee. Payment guarantee: The exporter upon that matches the LC Confirmation wants and approval of the firm can gain the non-recourse payments or payments guarantees.
Charges Target Customer: Two percent of the confirmed amount, with minimum of charged quarterly. The fee will rise subject to the degree of risks of the relevant countries. Exporters would love to induce payment confirmation from a bank with the exception of the problem; Exporters would love to induce non-recourse funds once presentation of documents yet the problem includes a smart credit standing.
Process: Banks provides revolt upon the request of the problem beneficiary once advising the LC; LC Confirmation the exporter presents the obliging documents to Bank makes non-recourse payments or irreversible payments guarantees to the exporter once examination and approval; organization mails the documents to the foreign issue bank to mention compensation and might ensure the payment once the foreign payment received.
When a Letter of Credit (LC) is issued, the LC issue consultancy sends the LC either to its branch workplace or correspondent bank that is often set within the seller's (beneficiary) country. The branch workplace or correspondent bank that receives the LC is understood because the Advising Bank. The seller can request the buyer to specify his own banker as the Advising Bank. However, if the seller's bank does not maintain correspondence relationship with the Issuing Bank, the Issuing Bank may appoint another bank as the Advising Bank, which may in turn utilizes the service of the seller's bank as the second Advising Bank.