Import Services

Letter of Credit Issuance

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 of Issuance 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 Letter of Credit Issuance?

  • Grow your business with the Best Trade Finance Bank in India and the bank that was named the Rising Star for the Transaction Bank category, both awarded by The Asset in 2013
  • 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
  • Save time and ensure faster delivery by applying for a Letter of Credit online through IDEAL™, our online banking platform
  • Ensure payments are made only when the necessary documentation is received and has been checked by our experienced, certified documentary checker
  • Submit forms any time before 6pm on a working day to ensure your documents are processed on the same day. We offer one of the latest cut off times in India for your convenience

Product Details


 The common types of letter of credit are:

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


ItemPricing

Commitment

0.15% per quarter or part thereof, min INR 2,000

Usance

Up to ten days: 0.15% flat

 

Ten to 90 days: 0.30% flat

 

Over 90 days: 0.30% flat for first three months + 0.1% per additional month or part thereof

Retirement

With FX: 0.15% flat, min INR 1000

 

Without FX: 0.25% flat min INR 1000

Amendment

Non-financial: INR 1,500 flat + cable

 

Financing: same as LC Issuance

Cancellation

INR 1,000 flat

Discrepancy charges

USD 100 (or equivalent)

Cable – LC issuance

INR 1,500

Cable - payment/ retirement/ advise of acceptance/ refusal

INR 750

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.

 

How do I apply?

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