Letter of Credit

A brief description

A letter of credit (hereafter referred to as “LC”) is a payment method that arranges conflict of interests between the buyer and the seller and used with the purpose to decrease the risk caused by the payment to be made and default of product supply.

A brief description

To start a new business relations with your partners.
When the social and economic environment of the importer’s country is stable.
If the buyer’s solvency is doubtful.
If the buyer desires to receive the goods ordered on time according to the schedule.

Импортлогч (худалдан авагч)

Бараа бүтээгдэхүүнээ цаг хугацаандаа, захиалгын дагуу авах боломж
Бараа ачигдсанаас хойш төлбөр хийх, төлбөрийн нөхцлийг хойшлуулах боломж
Компанийн санхүүгийн удирдлагыг оновчтой болгох, мөнгөн урсгалаа зөв зохицуулах боломж
Шууд төлбөртэй харьцуулахад санхүүжилтийн өртөг бага (зардлын харьцуулалтын жишээг энд дарж үзнэ үү)
Хямд эх үүсвэртэй зээл болох боломж (импортыг дэмжих зээл)

Экспортлогч (худалдагч)

Барааны төлбөрөө баталгаатай хүлээж авах боломж
Импортлогч талын төлбөрийн чадвараас үл хамааран үйлдвэрлэлээ эхлэх, бараа ачуулах боломж
Санхүүжилтийн эх үүсвэр болох боломж
Олон улсын стандарт, банкны нэгдсэн журмаар зохицуулагддаг тул хууль эрх зүйн эрсдэлгүй

Олон улсын стандарт, банкны нэгдсэн журмаар зохицуулагддаг тул хууль эрх зүйн эрсдэлгүй

Forms of LC
- Revocable LC: A LC that can be amended or canceled any time by the Buyer (the applicant) without the approval of the Seller (the beneficiary).

Iirrevocable LC: A LC that cannot be canceled or modified in any way without explicit consent by the affected parties involved.

Payment types

Sight payment: The payment is made immediately after the required documents have been submitted to the authorized bank based on required inspection.

Deferred payment: The payment is made at a certain time later as defined in the LC document.

Confirmed or not confirmed
- Not confirmed: Only issuing bank of a LC will be responsible for the payment.

Confirmed: Besides the issuing bank, the confirming bank will be responsible for the payment as well.

Fees and commissions for the issuing LC
To issue a LC	0.2% /min. USD 150.0, max USD 350.0/
To check LC documents and perform the payment	USD 50.0
Additional services (fees deducted based on the customer’s request)
To increasing the amount of a LC (from increased amount)	0.2% /min. USD 50.0, max. USD 150.0/
To amend LC’s terms and conditions	USD 50.0
To cancel a LC	USD 50.0
For the each set of conflicted documents	USD 50.0
To dispatch documents by post	According to DHL rates
The risk commission will be charged additionally for issuance of uncovered LC.	According to contract: (Foreign currency - min. USD 150.0)
	According to contract: (Domestic currency – min. MNT 150,000.0 )
Any other banking fees and commissions related to a LC shall be borne by a LC applicant.
For the confirmed LC, foreign bank’s fees and commissions will be added.

Fees and commissions for the receiving and advising LC
To advise issued LC	USD 30.0
To check LC documents and perform the payment	0.15% /min. USD 75.0, max. USD 350.0/
Additional services (fees deducted based on the customer’s request)
To advise amendments of a LC	USD 10.0
To advise cancellation of a LC	USD 25.0
Risk commission of confirming LC issued by other banks	Set by the Credit Committee (min.USD150.0)
To dispatch documents by post	According to DHL rates
Any other banking fees and cost related to a LC shall be borne by the beneficiary.

Request to issue a LC (according to the Bank form);
Sales and service agreements, or related invoices;

Click here to get bank application form for issuance of L/C;

Click here to get bank application form for L/C amendment.

In order to process your request for Letter of Credit you need to have a current account with the bank

You can lower your expenses and increase working capital by using our Letter of Credit with Import supporting loan

You can open Letters of Credit through our correpondent banks