Letter of credit

Reduce the transaction risk for the importer and the exporter and build secure business relationships, particularly with new partners.

This is an undertaking from the buyer’s bank to pay a certain amount of money to the seller if the seller meets all the requirements specified in the letter of credit.

 

Advantages

 

For the buyer: 

  • The payment is made only after submission of the documents proving the dispatch of the goods 
  • By opening a letter of credit, the buyer confirms its solvency – this may ensure more favourable payment terms for the buyer in the future 

For the seller:  

  • Receipt of the payment in due time if all documents requested under the conditions of the letter of credit have been submitted 
  • Reduced production risks, primarily in cases where the buyer cancels or changes the order 

 

Available services

 

For the buyer (importer):

  • Issuance of letters of credit by a client’s order

For the seller (exporter):

  • Advising on the letter of credit to the client
  • Transfer of letters of credit

Documents required to issue an import letter of credit  

  • Documentary credit application 
  • Passport or eID card of the company’s authorised representative 
  • Information on the transaction
  • If the collateral is not cash cover in the account, the following documents must be submitted in addition:

- Financial statements for the last two years and operational results (including the breakdown of debtors and creditors’ accounts)

- Information on the collateral

- Other documents as requested by the bank

Steps to work with an import letter of credit

1

Agree on the letter of credit with your partner

Sign the agreement providing for payment by the letter of credit 

2

Submit the application

Fill in the Documentary credit application and submit it together with the required documents to the bank

3

Enter into the agreement and arrange the collateral

Enter into the agreement on the collateral (cash cover, credit line or collateral against movable/immovable property, etc.) with the bank 

4

The letter of credit will be sent to the seller’s bank

PNB Banka will send the letter of credit to the seller’s bank through the SWIFT system. After the seller dispatches the goods and submits the documents to its bank, the seller’s bank will send the documents to PNB Banka

5

Making the payment

If the documents on delivery of the goods are compliant with the letter of credit, PNB Banka makes the payment and issues the documents to the buyer

Steps to work with an export letter of credit

1

Agree on the letter of credit with your partner

Sign the agreement providing for payment by the letter of credit

2

Receiving the letter of credit

The bank receives the letter of credit from the seller’s bank through the SWIFT system and advises on it to the seller

3

Dispatching the goods

After the goods have been dispatched, the seller submits the documents to PNB Banka, which then sends the documents for payment

4

Making the payment

PNB Banka receives the payment and transfers it to the seller

Apply for a consultation

Pricelist

Import letters of credit 

Opening of a letter of credit 0.2 % of the amount (minimum EUR 300)
Payment of documents 0.2 % of the amount (minimum EUR 200)


Export letters of credit 

Advising on the letter of credit 0.2 % of the amount (minimum EUR 300, maximum EUR 3,000)
Verification and payment of documents 0.2 % of the amount (minimum EUR 300)

Full pricelist for corporate clients