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 is one of the Strong facilities
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 Bank 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 CREDITS 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 Department) 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.
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