Documentary Letter of Credit
A Documentary Letter of Credit is a payment mechanism that ensures the bank will compensate the beneficiary upon the presentation of the required document(s) as specified in the letter of credit.
Parties Involved in a Documentary Letter of Credit
Applicant
Beneficiary
Issuing Bank
Confirming Bank
Import Documentary Letter of Credit
Used when a company purchases goods or services. Payment is made to the seller/beneficiary after the goods have been shipped and the required documents are submitted to the bank. This mitigates the buyer’s risk of not receiving the goods.
Additional opportunities for exporters
Letter of Credit Confirmation Upon Request
TBC Bank can confirm a letter of credit issued by a foreign bank. If requested by the beneficiary, TBC assumes the obligation to verify the documents and make the payment.
Letter of Credit Financing/Discounting
Used for deferred payment transactions. The bank pays the seller immediately upon submission of the required documents, while the buyer is obligated to pay within the period specified in the letter of credit.
