A letter of credit is a form of payment wherein the Bank, in accordance with the instructions of the client or on behalf of the client, or on its own behalf, is obligated to make a payment to another party.
The Bank transfers the payment at the request of the client at a predetermined time.
The letter of credit endows the conclusion of trade transactions with confidence and reduces possible payment or performance risks. All payments are made under the Bank’s control.
A letter of guarantee is a written obligation stating that the Bank will pay a third party in the event that the client cannot fulfill its obligations to counterparties.