LC or SKBDN Issuance

At a Glance

A Letter of Credit (LC) is issued at your request to assure payment to your supplier up to a stated amount, within a prescribed time.

Build stronger relationships and support new business opportunities

Ensure the necessary documents are received for goods clearance

Documents are checked for compliance and terms before you make payment

Types of Letter of Credit

	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.

	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.

How it Works

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

Features & Benefits

Our experts can offer you advice and expertise

Provide your sellers with assurances of payment through our Letters of Credit

Apply for a Letter of Credit online via DBS IDEAL, our online banking platform

FAQs

	Can you issue a LC to my seller if I do not have a DBS credit facility?
	No, you must obtain a credit facility with DBS before we can finance your purchases. Please call our BusinessCare at 1500380 (Indonesia) or +6221 8082 6902 (Overseas) for more information.

	How do I complete the LC application form?
	Please call our BusinessCare at 1500380 (Indonesia) or +6221 8082 6902 (Overseas) for more information.

	Can DBS issue a LC if the seller doesn’t provide the advising bank’s information?
	Yes. We issue the LC 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.