Guarantees and Documentary Credits


Documentary Collection

Documentary collection provides assurance for the seller (exporter) to retain control of the goods (documents) until payment is received or accepted on usance draft as per the collection instruction.  Exporter appoints bank as an agent to collect funds from importer against presentation of shipping documents without bank's undertaking. Documents may be released against payment (D/P) or against acceptance (D/A) of exporter's Bill of Exchange

Features 

  • Giving confidence to the exporter to collect payment through Bank Albilad's international network.
  • Simplicity and relatively low-cost trade solutions which should provide efficiency for both exporter and importer.

Conventional LC

A Letter of Credit or L/C is a written undertaking by Bank Albilad (issuing bank) on behalf of an importer (our customer) that payment will be made for goods or services supplied by an exporter (the beneficiary) provided that the exporter complies with all the terms and conditions established by the credit

Musharakah LC

Musharakah LC is a competitive Islamic short term post shipment financing provided to importers to settle their Sight/ Usance L/C.Musharakah functions like a limited partnership between Bank Albilad and customers who need to import certain goods and equipment, but do not possess sufficient funds to do so.  In this type of transaction, the customer provides a portion of the funds and Bank Albilad provides the remaining funds.  Bank Albilad then issues LCs to import the goods.

Types of Letters of Credits

  • Sight L/C: Bank Albilad will pay the negotiating bank on receipt of documents and sell its share in the goods to the customer on deferred payment terms
  • Usance L/C: Bank Albilad will sell its share in the goods to the customer on deferred payment terms for an agreed period beyond the maturity due date 


Features 

  • Offering assurance to both buyer and seller through our banking intermediation.
  • Giving security to importer that payment will only be made with compliance of stipulated document required under the credit.
  • Increasing importer's credit standing to their supplier by providing security of payment to the supplier through our issuance of an undertaking to make payment for goods or services once complies with all the terms and conditions contained in the credit.










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