You need the support of knowledgeable trade finance specialists to rely on.
At NBK KSA, Trade Finance gathers a team of talented experts with vast and cumulative experience. This, complemented by the latest technology of world-class standards, is the best solution for importers who are seeking expertise for their Letters of Credit, guarantee and structured trade deals.
Our Trade Finance team's vast experience and knowledge has enabled us to offer a high degree of professionalism. NBK KSA is an excellent venue for traders to structure project finance-based complex letter of credit and Guarantee transactions.
Letters of credit (LC)
A Letter of Credit is a conditional payment mechanism under which the issuing bank irrevocably promises to pay the seller if presented documents comply with all of the Credit’s terms and conditions.
- Irrevocable LC
- Transferable LC
- Revolving LC
- Standby LC
Letters of guarantee (LG)
The department is experienced in proactively recommending to clients the best format and method to protect their rights and interest in all guarantee categories such as bid bonds, performance, advance payment, retention, suppliers credit guarantee, contract guarantees and others.
Documentary Collection is the collection by a bank of funds due from a buyer against the delivery of documents. The bank has no liability for payment.
Process – The bank, acting as agent for the seller/exporter presents documents to the buyer/importer through the party’s bank and in exchange receives payment of the amount owed, or obtains acceptance of a time draft.
Characteristics of a collection:
- Simple and inexpensive compared to a letter of credit
- Often faster receipt of payment than open account
- Normally the seller remains title to the goods until payment or acceptance
- Seller must pay for return transportation if not paid for
Reduce your turnaround time, improve your cash flow, and convert your accepted bills to cash at competitive rates for different foreign currencies.
Fees & Charges
The commission rate is based upon SAMA Tariffs as well as your financial strength.
Other charges may include correspondent bank charges and expenses incurred by relating to the letter of credit such as courier, swift charges, etc.
How do I apply for the issuance of an import letter of credit?
Liaise with your NBK Relationship Officer about your needs. To support the issuance of an import letter of credit, you will have to set up a line of credit. Once approved, complete the application for an irrevocable documentary credit and bring it to your NBK Relationship Officer.
If you require assistance in completing the application, you may our Trade Finance division.
What is the uniform customs and practice for documentary credits (UCP)?
The uniform customs and practice for documentary credits (UCP) is a set of recognized and internationally accepted rules for documentary credits published by the International Chamber of Commerce (ICC) in Paris, France. These rules are used in the international trade community for determining the roles and responsibilities of all parties involved in letters of credit, including standby letters of credit, where the letter of credit expressly stipulates that it is subject to the UCP.
What are the risks to the buyer in an import letter of credit?
Under an import letter of credit, the bank promises to make payment to the seller against the seller's presentation of pre-specified documents. However, it does not provide the buyer with protection if the seller presents documents that comply with the letter of credit but later prove to be fraudulent. If all appropriate documents are presented to the bank in absence of clear fraud, the bank will not be able to refuse payment should a dispute arise between the buyer and seller.
To reduce this risk, a buyer should thoroughly investigate prospective sellers. Our Trade finance experts will assist you in compiling this information using public information available from their global contacts.