Letter of credit

We provide this service to our clients who wish to acquire a letter of credit to present as a way to guarantee payment under certain specified circumstances. In cases where you may need to give a seller the assurance that they will receive the correct amount of money as their payment at an agreed time. Most often, this form of payment guarantee is used for international purchases where they may be different laws and both the buyer and seller have never met in person due to distance, you may use a letter of credit so each party will be assured that the payment will be processed.  We issue this negotiable instrument and pay the required amount into the bank account of the seller. In some instances, a letter of credit may be drafted in a way that makes it a transferrable credit, and the seller may turn over the payment to a third party and give them the right to withdraw the payment. We typically request that you tender cash or a pledge of securities to serve as collateral before we issue you a letter of credit.

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We will also collect a fee for this service. This fee is calculated and gotten from a percentage of the total amount that the letter of credit represents. After placing a request for a letter of credit, it will be issued to you in a few days, typically within two business days. We issue our letters of credit according to industry regulations and they are overseen by The International Chamber of Commerce Uniform Customs and Practice for Documentary Credits.

Below are the kinds of letters of credit we issue:

  • Revolving letter of credit – with this kind of letter of credit, you are able to make multiple amount of draws on an account within a particular time frame. The amount of draws you can make is limited to a certain number.
  • Confirmed letter of credit – with this kind of letter of credit, a different bank besides the issuing bank can guarantee the letter of credit for you. The second back will most likely be the sellers bank and they will ensure payment to the seller if your bank defaults. This kind of letter can be requested by the issuing bank and it is done mostly for international transactions.
  • Travellers letter of credit – for our clients who are traveling abroad, this kind of letter of credit can be used to guarantee an issuing bank so they are more inclined to honor bank drafts made in banks of the country you have travelled to.
  • Commercial letter of credit – with this kind of letter of credit, we make a direct payment to the beneficiary of the transaction, whether it is to the seller or a third party. The opposite of this is a standby letter of credit where we will only take on the payment in the case where the holder is unable to make the payment themselves.

Our letters of credit can be used in different countries in Asia, Africa, Europe, Latin America and the Middle East.

Fill out the application form and send it to us: info@metro-bancorp.com

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