LETTER OF CREDIT
CORPORATE BANKING >> LETTER OF CREDIT
A letter of credit is a written instrument, issued at the request of a buyer (applicant) in favor of the seller (beneficiary) undertaking, to honor the documents or drafts drawn by the seller in accordance with the terms and conditions stipulated in the credit, within a specified time. Letter of Credit one of the Strong facility available under Trade Finance, especially for Importers. This facilitates the Importer to negotiate the deal with better terms and conditions and enables him to conduct the business without locking his own funds. To help the Importers, Maiwand offers the Foreign as well as Inland Letter of Credit. However, only Sight LCs will be opened & no Usance LCs will be issued.
LETTER OF CREDIT ARE ISSUED ON FULFILLING THE FOLLOWING CRITERIA :
1. Prescribed Application along with Confirmed Contract / Performa Invoice.
2. Statutory License from competent authority (AISA / MOC / MOI / Customs Dept) etc. Audited Financials/ Business Plans.
3. Upfront & 100% Cash Margin. However, lower cash margins can be considered subject to provision of suitable collateral security and its assessment will be done on case to case basis.
4. Upfront Commission @ 0.30% of LC amount for 1st quarter and @ 0.25% of LC amount for subsequent quarters subject to a minimum commission of $ 300.
5. Cash Margin / Collateral Security held with the Bank will be returned to the customer only on completion of the transaction under LC.