Non-Funded
Facilities/Trade Finance
1. Letter of Credits:
Afghan United Bank’s trade finance is tailored to meet
the international business needs of your company.
With Afghan United Bank’s Letter of Credit, you can
ensure your suppliers of the timely payments for your imports. Their Letter of
Credits is backed by confirmation from reputed International banks and is thus
accepted by exporters worldwide. Letter of Credit is one of the most widely
used modes of settling international trade debts. It is also a convenient and
common method of securing short term finance from the banks to bridge the
temporary liquidity crisis for buyers/suppliers.
Afghan United bank offers both inland and
foreign LCs based on the tenor of the bill namely:
·
Sight
LC
·
Usance
LC
1.1 Imports:
1.1.1 Letter of
Credit:
When buying goods from overseas suppliers, you will
wish to receive the goods as ordered in the right quantity, right time and at
the right place. You will also wish to make payments only after receipt of the
required documents including the title of goods.
Afghan United Bank can help solve your needs by
issuing a documentary credit on your behalf. A documentary credit is the Bank’s
guarantee of payment for a shipment of goods against specific documents as
stipulated on it.
By using a Letter of Credit, AUB will only make
payment after receipt of titles and other documents that should fully comply
with the terms of the credit. You can enjoy a safer and cheaper alternative to
making advance payment or deposits.
1.1.2. Back-To-Back
Letter of Credit:
If you are an intermediary and your supplier wants to
sell on documentary credit term only, you may apply for the issuance of a Back-to-Back
Letter of Credit from Afghan United Bank against the export Letter of Credit.
A Back-to-Back Letter of Credit is issued against the
export credit (the master credit), but the terms and conditions may not be the
same as the export credit. You must submit your own draft and invoice, together
with the other shipping documents presented by your supplier to secure payment
under the export credit. After processing, you will have the export proceeds to
pay your supplier and the balance credited to your account.
1.1.3. Deferred
Letter of Credit:
A Deferred LC is a documentary credit which allows the
nomination of a bank, or the issuing bank to effect payment against stipulated
documents at a maturity date as specified or determinable from the terms of the
credit. With this you are able to receive the goods now and pay later.
1.1.4. Import bills
for collection:
By informing your supplier to send their shipping
documents to Afghan United Bank, you will enjoy prompt advice upon the Bank’s
receipt of documents and efficient payment according to your instructions.
1.1.5. Import
Financing:
Afghan United Bank will be able to provide financing
solutions to pay for the supplier’s documents, under letter of credit or import collections.
1.2. Exports:
If you are in the export business, AUB can also help
you with Export L/C, advising L/C, Safekeeping L/C, Confirmation L/C, Checking
and Negotiation. For financing solutions, tap on to Pre-shipment Export
Finance, Export Bills for Collections, Invoice Financing etc.
1.2.1. Export
letter of credit advising:
You can benefit from prompt advising of export letter
of credit from a wide international network through Afghan United Bank.
1.2.2. Export
letter of credit safekeeping:
Rather than be inconvenienced by coming to the bank for
collecting your export letter of credit, Afghan United Bank will keep your Submitted
original documents in a safe custody and send you a working copy to facilitate
the preparation of documents.
1.2.3. Export
letter of credit confirmation:
Exporters may deal not only with unknown foreign
buyers, but also with their banks which are less well known institutions and
whose letter of credit (LC) may not be sufficient comfort. By requesting Afghan
United Bank to confirm your export LCs, you obtain the Bank’s guarantee of
payment for documents presented in compliance with the credit.
1.2.4. Pre-shipment
export financing:
The Bank also provides pre-shipment finance against
irrevocable letters of credit from or purchase orders in a number of currencies
to allow you to trade with confidence. If you need to fulfil a sales contract
but need funds to purchase raw materials or process goods for export, Afghan
United Bank offers you pre-shipment export financing in a variety of
currencies.
1.2.5. Letter of
credit checking and negotiation:
Afghan United Bank’s thorough checking standards will
reduce the chances that your documents will be rejected. Strict service
standards are applied to ensure that your documents are negotiated and
dispatched quickly.
1.2.6. Export bills
for collection:
Simplified dispatch tracking of payment, and
reconciliation of your export collections when you choose Afghan United Bank’s
documents against acceptance, documents against payment or clean collections.
AUB is also offering discounting of export collections under mutual agreement.
2. Letter of
Guarantees:
A bank guarantee is a written promise issued by a bank
at the request of its customer, undertaking to make payment to the beneficiary
within the limits of a stated sum of money in the event of default by
principal.
The most purposes for the uses of Bank Guarantees are:
2.1. Bid Security
(Bid Bond):
A Bid Security, also called a Tender bond or a tender
guarantee, is an undertaking by a Guarantee issuer (usually a bank) to pay a
sum of money to your prospective buyer (the beneficiary) if you win a Bid for a
project but then fail to enter into the project contract.
2.2. Performance
Guarantee (Performance Bond):
The performance Bank Guarantee is an irrevocable
undertaking of a bank to pay a certain amount to the beneficiary of the
guarantee within the specified limits of the guarantee if the bank’s customer
who has requested the bank to issue such guarantee (the principal) has failed
to fulfil his obligations towards the beneficiary.
2.3. Advance
Payment Guarantee:
A guarantee issued by a bank, on behalf of a seller to
a buyer, in relation to any advance payment that is made by the buyer to the
seller to allow the contract to commence. If the contract is not completed the
buyer can claim reimbursement of the advance payment under the guarantee.
AUB’s Bank Guarantees can be made available to you
against minimal requirements and in the shortest possible time. Afghan United
Bank issues Letter of Guarantees on behalf of their valuable customers to
various Government, Semi Government Departments and Private Sectors. The Bank
issues bid bonds, advance payment guarantees, performance guarantees and
standby LCs.
2.4.
2.4. Retention Bond
A type of performance bond that protects
the beneficiary after a job or project is
finished. It guarantees that the contractor will carry out
all necessary work to correct structural and/or
other defects discovered immediately after completion of
the contract, even if full payment has been made to the contractor.
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