Import Services

Letter of Credit Issuance

Provide assurance to your suppliers when the complying documents are presented

Build relationships with clients and support new business opportunities with a DBS Letter of Credit. We issue a Letter of Credit at your request, assuring payment up to a stated amount within a prescribed time. We then check that the documents received are in compliance with the Letter of Credit terms and certify them before you make payment.

 

How Does A Letter of Credit Work?

 

 

  1. The buyer and seller enter into a contract and agree that payment be made on the basis of Letter of Credit
  2. Buyer approaches DBS (issuing bank) to issue Letter of Credit in favour of the seller
  3. DBS issues Letter of Credit which is advised through its branch or correspondent bank (advising bank) in the seller’s country
  4. Advising bank advises Letter of Credit to the seller
  5. Upon receipt of the Letter of Credit, the seller prepares shipment and delivers documents to presenting bank
  6. Presenting bank despatches documents to DBS for payment
    1. DBS pays the presenting bank upon verifying the documents are in order
    2. Upon receipt of payment, presenting bank pays the seller
  7. Buyer pays the document amount to DBS
  8. DBS forwards the documents to the buyer, who can now use them to obtain the goods

 

Why choose DBS Letter of Credit Issuance?

  • Grow your business with the Best Trade Finance Bank in Singapore, as named by Alpha Southeast Asia and The Asia Banker in 2012. We also received this accolade from Global Finance in 2012, for the 8th consecutive year
  • Leverage our "AA-" and "Aa1" credit ratings to provide your sellers with assurances of payment through our Letters of Credit
  • Enlist the help of our specialists, who offer advice and expertise
  • Ensure payments are made only when the necessary documentation is received and has been checked by our experienced, certified documentary checker
  • Submit forms any time before 3pm on a working day to ensure your documents are processed on the same day

Products Details

 

Sight Letter of Credit

The issuing bank will honour the payment at “sight”, which means the payment will be made once the documentation received is in order

Usance Letter of Credit

The Issuing bank will accept the draft once all documentation received is in order and agree to pay on the maturity date

Red Clause Letter of Credit

This allows the issuing bank to make partial advance payment to the seller upon receipt of the documentation. This is commonly used in manufacturing industries

Transferable Letter of Credit

This is usually used by middleman traders who do not enjoy a credit facility.  DBS will transfer the Export Letter of Credit in favour of the ultimate seller at the request of the middleman, who will then sell the goods under the Export Letter of Credit

Back-to-Back Letter of Credit

This is used by middleman traders with a credit facility. The master Export Letter of Credit from the buyer’s bank backs the issuance of an Import Letter of Credit. Proceeds from the master Export Letter of Credit are then used to pay the bank under the Import Letter of Credit

Standby Letter of Credit

This is typically used to assure the applicant will meet the payment obligations or contractual performances specified. Another commonly used product in this situation is a Banker’s Guarantee

 

Issuance

Back-to-Back

0.15% for every three months of validity. Min three months and USD 40 or equivalent

Front-to-Back

Amendment and cancellation

Increase in amount

0.15% for every three months of validity. Min three months and USD 40 or equivalent

Extend expiry date

0.15% for every three months of validity. Min three months and USD 40 or equivalent

Others

USD 40 or equivalent

Handling of documents

Import documents

0.125%, min USD 40 or equivalent

Acceptance of usance LC/
Defer payment under LC

0.125% per month, floatable at max of 0.25% per month; min one month and USD 40 or equivalent

Discrepancy

USD 60 or equivalent per set of documents (charged against beneficiary)

Reject documents

0.125%

FAQs

Can you issue a Letter of Credit to my seller if I do not have a DBS credit facility?

No, you must obtain a credit facility with DBS before we can issue a Letter of Credit to your sellers. Please call us at 4008208988 should you require a credit facility.

Can DBS issue a Letter of Credit if the seller does not provide the advising bank’s information?

Yes. We issue the Letter of Credit and advise through our network branch or agent bank in the event that we do not have a branch or office in the seller’s country.

 

How do I apply?

Simply call us at 400 820 8988 (or +86 400 820 8988 if you're overseas) or visit any of our Branches. You may also email us and our Relationship Manager will contact you as soon as possible.

 

Disclaimer:

The information provided in this website is for general information only and nothing contained in this website constitutes an invitation, offer or solicitation with respect to the entry into transactions mentioned in this website or subscription, purchase or sale of any products, services, securities or other financial instruments mentioned in this website or the taking of any position or the adoption of trading strategy in respect of any asset class (eg. currency, interest rate, commodity, equity etc). The information provided in this website is not provided with regard to the specific investment objectives, financial situation and the particular needs of any particular person who accesses this website.

 

The information provided on this website is subject to change without notice, its accuracy is not guaranteed, and it may be incomplete or condensed. Accordingly, no representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information in this website. We are not acting as your advisor or agent when providing the information in this website. The information in this website does not purport to identify the risks (direct or indirect) or other material considerations which may be associated with you entering into a particular transaction, subscribing for a particular service or purchasing or selling a particular security or financial instrument. Prior to entering into any proposed transaction or entering into any subscription, purchase or sale of any security or financial instrument, you should determine (after consultation with your own advisors if you deem fit), without reliance upon us or our affiliates, the economic risks and merits, as well as the legal, tax, accounting or other material characterisations and consequences of the transaction, subscription, purchase or sale, as the case may be, and that you are able to assume these risks.

 

We, and/or our affiliates, may hold, or trade, or act as market-maker, in any securities or other financial instruments mentioned in this website or related derivatives or may take positions or use trading strategies in respect of any asset class similar to or which differ from or be contrary to those mentioned in this website. We, and/or our affiliates conduct many businesses and activities that may relate to issuers of third party securities mentioned in this website and may provide broking, banking and other financial services to such issuers.

 

Anyone receiving or accessing this website must make their own assessment of the materials herein and conduct such investigations and seek such professional advice as they think fit for such purpose. The information provided on this site should not be regarded by recipients as a substitute for the exercise of their own judgment.

 

© DBS BANK LTD, 2013. All rights reserved. Any unauthorized use, duplication or disclosure is prohibited by law and will result in prosecution.

Awards
Best Structured Trade Finance Solution, China 2015

Best Structured Trade Finance Solution, China 2015

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