Letter Of Credit
A letter of credit is a written instrument, issued
at the request of a buyer (applicant) in favor of
the seller (beneficiary) undertaking, to honor the
documents or drafts drawn by the seller in accordance
with the terms and conditions stipulated in the
credit, within a specified time. Letter of Credit
one of the Strong facility available under Trade
Finance, especially for Importers. This facilitates
the Importer to negotiate the deal with better terms
and conditions and enables him to conduct the business
without locking his own funds. To help the Importers,
Maiwand offers the Foreign as well as Inland Letters of Credit. However, only Sight LCs will be opened & no Usance LCs will be issued.
Letters of Credit are issued on fulfilling the following criteria :
1. Prescribed Application along with Confirmed Contract / Performa Invoice.
2. Statutory License from competent authority
(AISA / MOC / MOI / Customs Dept.)etc. Audited
Financials/ Business Plans.
3. Upfront & 100% Cash Margin. However, lower
cash margins can be considered subject to provision
suitable collateral security and its assessment will be done on case to case basis.
4. Upfront Commission @ 0.30% of LC amount for
Ist quarter and @ 0.25% of LC amount for
subsequent quarters subject to a minimum commission of $ 300.
5. Cash Margin / Collateral Security held with
the Bank will be returned to the customer only on
completion of the transaction under LC.