A Documentary Credit (or Letter of Credit) is a guarantee of payment to the beneficiary (supplier of goods or services) subject to all the terms and conditions of the Documentary Credit being met. Documentary Credits may be payable at sight or after sight where extended terms have been agreed to.
Importer: BSP establishes the Documentary Credit in favour of the beneficiary (supplier) on your behalf with payment or acceptance made subject to presentation of compliant documents. BSP will receive these documents for release to you enabling the uplift of goods.
Exporter: BSP will receive the Documentary Credit issued in your favour. Shipment of goods occur and documents are then presented to BSP. Subject to the documents being compliant with all the Documentary Credit terms and conditions, payment or acceptance occurs with the documents then dispatched to the importer's bank.
By using BSP, there is control over the documents and therefore usually the goods and there is the additional comfort for the beneficiary of having payment or acceptance guaranteed by a bank.
All Letters of Credit are subject to international standards UCP 600.
For more information, please contact one of our Relationship Managers or phone Customer Care on 132 888.