Letter of Credit Issuance
Guarantee payment to your suppliers
Sight Letter of Credit
Issuing bank will honour payment at “sight”, meaning payment is made once documentation received is in order.
Usance Letter of Credit
Issuing bank will accept the draft once all documentation received is in order and agree to pay on the due date.
Red Clause Letter of Credit
Allows the issuing bank to make a partial advance payment to the seller upon receipt of documentation.
Transferable Letter of Credit
DBS transfers the Export LC in favour of the ultimate seller at the request of the middleman who will then sell goods under the Export LC.
- The buyer and seller enter into a contract and agree that payment be made on the basis of Letter of Credit
- Buyer approaches DBS (issuing bank) to issue Letter of Credit in favour of the seller
- DBS issues Letter of Credit which is advised through its branch or correspondent bank (advising bank) in the seller’s country
- Advising bank advises Letter of Credit to the seller
- Upon receipt of the Letter of Credit, the seller prepares shipment and delivers documents to presenting bank
- Presenting bank despatches documents to DBS for payment
- DBS pays the presenting bank upon verifying the documents are in order
Upon receipt of payment, presenting bank pays the seller
- Buyer pays the document amount to DBS
- DBS forwards the documents to the buyer, who can now use them to obtain the goods
Can you issue a Letter of Credit to my seller, without a DBS facility?
Please refer to Online Letter of Credit
“DBS helps us a lot in establishing whether the market, bank and customers are good enough for us.”
Mr Chandru Dadlani, Director - Aakash International Pte Ltd