letters-of-credit-issuance

Letter of Credit Issuance

Provide assurance to your suppliers when the complying documents are presented

Letter of Credit Issuance

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.
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Ensure the necessary documents are received for goods clearance

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Documents are checked for compliance and terms before you make payment

Features & Benefits
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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

  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
  7. DBS pays the presenting bank upon verifying the documents are in order
    Upon receipt of payment, presenting bank pays the seller
  8. Buyer pays the document amount to DBS
  9. 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 brfore 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.

Contact Us

Schedule a callback via this online form.

Alternatively, you can reach us at 1800 103 6500 / 1800 419 9500

Email: businesscarein@dbs.com