Letter of Credit
Letters of credit are considered as the most secure form of international payments. They are used mainly in foreign transactions. It is the obligation of the Bank issued by the order of the client (importer) against his counteragent according to the contract (exporter). Thus, the Bank undertakes the role of the broker between the Buyers and the Sellers through payments based on presentation of subsequent documents by the parties of the transactions.
The Bank Provides the Following Services:
- Opening, confirmation, advising and transfer of the letters of credit, fulfillment of other operations connected with the payments on these documents (change of the terms and conditions, revision of the documents, payments);
- Confirmation of the letter of credit by the first class foreign banks;
- Opening of the letter of credit on import at the expense of the resources of the client;
- Opening of the letter of credit at the expense of the credit line of the "IBA-Georgia".
JSC "IBA-Georgia" Exploits the Following Categories
of the Letter of Credit:
- Irrevocable letter of credit;
- Revocable letter of credits;
- Stand-by letter of credit;
- Confirmed letter of credit;
- Non-confirmed letter of credit;
- Transferrable letter of credit;
- Back-to-back letter of credit.
Advantages of the Letter of Credit are as follows:
- Guarantees of the export reimbursement receipt, regardless of the actions of the Buyer if the Seller accomplishes all terms and conditions of the letter of credit
- Prompt receipt of the payment for the goods after their shipment ( in case of the shipment of the goods and transmission of the documents to the Bank)
- Guarantees that the Seller will not obtain the export reimbursement until it accomplishes the terms of delivery of the goods as to the letter of credit
- The usage of the letter of credit in interlinked transactions, as well as the means of financing and provision of the financing