Import Services

Letter of Credit or SKBDN

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 Letters of Credit or Surat Kredit Berdokumen Dalam Negeri (SKBDN)?

  • 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 documentary checker
  • Submit forms any time before 1.30pm on a working day to ensure your documents are processed on the same day

Product Details


Common 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

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

FAQs

How do I complete the Letter of Credit application form?

Please call our DBS Indonesia Customer Centre at 1500 327 or 69 327 (if using a mobile phone) for more information.

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 our DBS Indonesia Customer Centre at 1500 327 or 69 327 (if using a mobile phone) for more information.

Can DBS issue a Letter of Credit if the seller doesn’t 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?

To apply, you will need to have the Letter of Credit facility with DBS. Please then submit the following documents to any of our branches:

  • Your application form (not necessary if you had applied via IDEAL™, our online banking platform)
  • Insurance Cover Note or Open Cover (for FOB and CFR)
  • Other underlying documents such as a copy of your Purchase Order 

Please call our DBS Indonesia Customer Centre at 1500 327 or 69 327 (if using a mobile phone) if you need assistance.

Awards
Best Trade Finance Bank in Singapore, 2013

Best Trade Finance Bank in Singapore, 2013, Alpha Southeast Asia

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