Export letter of credit is a form of payment, which decreases risks, related to international transactions, due payment, cancellation of orders and other risks following from a contract.
Export letter of credit means guarantee of the Bank to pay the seller a settled amount in exchange for related documents, proving shipment of the exported goods to the purchaser (the Customer of the Bank is the seller, exporter).
Upon request of the issuing bank of the export letter of credit or the exporter, additionally there may be attached confirmation of LPB. In this case, the exporter receives payment from the Bank after submission of all documents according to the provisions of the letter of credit.
The exporter may ask the Bank to carry out discounting of the letter of credit, i.e., pay the documents before the term, stipulated in the letter of credit. The Bank provides funding only for those letters of credit, which are issued by banks for which the Bank has established the permissible limit of funding.
The procedure of obtaining the export letter of credit:
- customer should open a current account in Latvijas pasta banka;
- bank receives from the purchaser's bank the opened letter of credit and notifies the Customer.
For more detailed information about export letters of credit please contact the Credit department by phone +371 6 777 2 999 or personally at the central office of the Bank.