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STAND-BY LETTERS OF CREDIT
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Trade and Finance Division offers stand-by letters of credit (SBLC) in order to perform a guarantee function, i.e. operating only for infringed cases of contract.

A Standby Letter of Credit are written obligations of an issuing bank to pay a sum of money to a
beneficiary on behalf of their customer in the event that the customer does not pay the beneficiary. It is important to note that standby letters of credit apply only whenever the issuing bank's commitment to pay is not contingent on the existence, validity and enforceability of its customerís obligation.

BENEFITS FOR A STAND-BY LETTER OF CREDIT:
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-   Allows the importer to establish a credit history with the exporter
-   Saves considerable money and time with repeat business because the importer only needs to cover the maximum exposure risk of the exporter at any one time with one SBLC covering an entire year
-   Easy to administrate and affordable
-   SBLC can be renewed, so it is flexible
-   SBLC ensures the delivery of goods or that the service or supplier performance will be provided in accordance with the terms of the trade contract
-   Ease of payment, the bank only needs to establish default of payment or performance from a few documents to establish this fact so that the exporter can be paid
-   Most reliable and simplest technique for the exporter
-   Time is gained in export trade because documents are only checked in exceptional cases when the buyer has defaulted
-   Payment from the importer is faster because once documents have reached the airport or port, by International Law only 3 to 7 days are given to review the documents and finalize the acceptance of the goods
-   Easy to administrate and affordable
-   Eliminates the problem of discrepancies, which occur 50% of the time using Documentary Letters of Credit (LC) as a payment mechanism, which can cause the payment to be delayed
-   Ease of Payment, the bank only needs to establish default of payment or performance from a few documents to establish this fact so that the exporter can be paid
 
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86 Makariuo 111 Ave, Office 4, 1077 Nicosia
Cyprus

 

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Letters of Credit
Stand-By Letters of Credit
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