Letter of Credit | DBS Bank India

Letter of Credit Issuance

Provide assurance to your suppliers when the complying documents are presented

Provide assurance to your suppliers when the complying documents are presented

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

Features & Benefits

Our experts can offer you advice on products and related guidelines

Apply for a Letter of Credit online via DBS IDEAL or at our branches

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.

	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 that 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

Fees

Refer to our pricing guide.

How to Apply

Simply submit your letter of credit application form at any of our Branches. Alternatively, you can apply via IDEAL.

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 visit us at any of our Branches should you require a credit facility.

	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 correspondent bank in the event that we do not have a branch or office in the seller's country.

	Does DBS issue Usance Payable at Sight (UPAS) Letter of Credit (LC) with reimbursement financing?
	Yes, DBS issues LCs with reimbursement financing arrangements as per the International Chamber of Commerce (ICC) uniform rules for bank to bank reimbursements under documentary credits.

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