Letters of Credit

Secure solutions for making and
receiving payments

When you need peace of mind, a Letter of Credit (L/C) is one of the most secure methods of settlement. It is the trusted guarantee you need to trade overseas.

We issue Import L/Cs on behalf of importers (or buyers), guaranteeing payment to exporters (or sellers). Payment is made as long as the documents comply with the terms and conditions of the credit.

An Export L/C is one that we have received from another bank. If you are the seller, it guarantees payment - again, as long as the documents comply with the terms and conditions of the credit.

Key benefits

  • Secure, fast payment - other than payment in advance, L/Cs are the safest and fastest method of receiving payments
  • Peace of mind - for the seller, L/Cs provide reassurance that they will get paid, provided their documents match the terms and conditions of the credit
  • Opens new markets - L/Cs provide the safety net to trade in markets where open account trading may not be appropriate
  • Customs and law - in some countries, law or tradition states trade must be supported by an L/C
  • Worldwide standards - L/Cs are subject to the globally recognised Uniform Customs and Practice (UCP 600) for Documentary Credit guidelines issued by the International Chamber of Commerce, which replaced UCP 500 on 1st July 2007. The changes mainly affect bank document checking - clarifying the processes with a streamlined set of articles and a new set of definitions. There will be little change to the way our customers carry out their business.
  • Irrevocable - they cannot be revoked or amended without all parties agreeing to cancellation
  • Electronic payments - L/Cs can be initiated electronically via your office PC by using RBS TradeFlow

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