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Commercial Banking issues Import Letters of Credit on your behalf that gives you the advantage with your suppliers. We extend Sight Letter of Credit (DP) and Usance Letter of Credit (DA) facilities to your clients for undertaking transaction for the import of goods. Letter of Credit is widely used to give protection to the exporter against the buyer’s and the country’s risk. At NIB the LC is a payment undertaking given to the exporter by the importer’s bank. In effect, NIB backs the transaction with its own credit standing and reputation. We offer our customers a binding payment undertaking to pay the seller, provided that the seller can present documents representing the goods supplied.
Documentary Collection
Import documents received under Usance Letter of Credit (DA) are lodged in a funded account and are released against:
- Acceptance of bill of exchange and execution of Trust Receipt.
- Pledge of imported goods.
- In case goods are pledged with NIB Bank, goods will be cleared through approved clearing & forwarding agent and delivery orders issued against cash receipts.
- Collateral security against mortgage of property, pledge of Government Bonds, Postal Deposit Certificates, Bank’s own Deposit Certificates etc. For relaxation in obtaining collateral security, approval of Branch Credit Committee will be required.
Shipping Guarantees
At the request of the importer, NIB issues a shipping guarantee in favor of the concerned shipping company to enable the importer to obtain delivery of goods without submission of the relevant bill of lading.
The shipping guarantee will be issued after obtaining the following
- Upfront proper documentation of the client.
- Standard indemnity from client stating irrevocably and unequivocally to accept the documents with or without discrepancies.
- An undertaking from the client to bear any exchange fluctuation difference in addition to all other charges.
Finance Against Trust Receipt (FATR)
NIB Bank may at the request of the customer, at the time of opening of the LC or at a later stage, release the import documents of related goods received under the LC against bills under collection either inland or foreign. This may be done to enable the party to obtain delivery of the goods and arrange to retire the documents out of the sale proceeds of goods or from other sources. The documents of title are delivered against the customer’s signature on the prescribed Trust Receipt form/related security documents covering hypothecation of goods.
Finance Against Imported Merchandise (FIM)
Wherever necessary at party’s request, the facility for financing imported goods against import LC established through NIB Bank will be made available for a short period (not exceeding ninety or (120) days). The financing may be repaid within the validity period either in installments or in a lump sum amount.
Guarantees
To protect you against currency fluctuation, Commercial Banking provides services to hedge against foreign exchange risks for foreign currency payments expected to be made or received by you. In the normal course of business we issue the following guarantees
Performance Guarantee
At the request of the customer, NIB Bank issues a performance guarantee, guaranteeing completion of work or supplies, as per terms of contract.
Bid Bond
NIB Banks issues bid bond in lieu of deposit of earnest money against bids for tenders.
Letter of Credit
Stand-by letter of credit is used as a substitute for the commonly used performance bond. This type of letter of credit may be issued to cover non-trade transactions and to guarantee performance of a contractor as supplier.
Advance Payment Guarantee
At your request we will guarantee you the amount of advance payment for satisfactory performance of a contract or other work as specified in the guarantee. It ensures that
- Instrument obligates NIB Bank to pay the guaranteed amount or the adjusted part thereof, without any dispute regarding improper use of the advance funds.
- Guarantee shall become operative only upon receipt of the advance money by NIB Bank for credit to your account. (This clause is incorporated in the guarantee).
Security Deposit Guarantee
At your request NIB Bank will issue you a guarantee in lieu of security deposit, generally to utility service organizations.
Retention Bond
NIB Bank also provides Retention Bond facilities to it’s customers.
