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28.08.2008 
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LCs
Letter of Credit (LC) is a an agreement between the client and the bank, where the bank will, upon instructions of the client (buyer), upon submission of documents and performance of other terms and conditions of the LC, make a payment to the seller. Legal provisions related to documentary LCs are contained in the Uniform Customs and Practice (UCP) for Documentary Credits ICC Publication 500 (1993 Revision).

Legal provisions related to documentary LCs are contained in the Uniform Customs and Practice (UCP) for Documentary Credits ICC Publication 500 (1993 Revision).

Clients of «Bank of Baku» can use the services of the Bank to transact with all types of LC available in an international trade practice.

Benefits of use of LCs in trade transactions:
  • Minimum risk associated failure to perform obligations in relation to delivery of goods or services or making of the payment;
  • opportunity to be insured against the following risks.
a. in local transactions
  • commercial risks
  • shipment risks
b. in international transactions
  • laws, customs rules and regulations
  • currency risks
  • distance, delay
  • country specific risk
  • transfer risks.
  • LC are less costly in comparison with obtaining of financing;
  • If that is your first transaction with a counter party, and you have not yet got commercial experience with that party, it is very useful to arrange the payment for sale and purchase via LC;
  • You may boost your international reputation by engaging the services of a reliable bank;
  • Through your partner bank you can settle your trade related problems faster and with fewer losses, etc.
Please take a note of our charges related to LC services:

Type of the service

Rate of charge

(Note: rate is fixed irrespective of the currency of the transaction)

For import LCs

Opening of the LC

0,2 % min. AZN 100

Review of documents (per package)

0,1 %, min. AZN 50

Inquiry to overseas bank for discrepancy

AZN 20

Transfer of funds under LC (per transfer)

0,1 % min. AZN 20 max. AZN 300

Increase of amount (from the amount of increase)

0,2 % min. AZN 50

Change or cancellation of LC (except for increasing of the amount)

AZN 50

For export LCs

Availing of the LC (without confirmation of the Bank)

0.1%, min. AZN 50

Availing of the LC (with confirmation of the Bank)

1.5 % per annum min AZN 50 (for full or incomplete quarter)

Review of documents (per package)

0.1%, min AZN 50

Inquiry to overseas bank for discrepancy

AZN 20

Transfer of LC

0.1%, min AZN 50

Increasing the amount of LC (without approval of the Bank)

0.1% min AZN 50

Increasing the amount of LC (with approval of the Bank)

1.5 % per annum min AZN 50 (for full or incomplete quarter)

Change or cancellation of LC (except for increasing of the amount)*

AZN 50

 
* Where simultaneously a number of amendments is required on documentary transaction, commission for changes will be paid only once.

Entrepreneurs and companies willing to use out LC services for their trading, will have a chance at any stage of the project to consult our professional specialists with respect to the best solution of various issues arising in course of the operation. For further information, please contact our Head Office or Markaz Branch Office of the Bank.
 
 

Additional information:



Please send us your queries related to this service. Approach any branch or office of the Bank or call Information center 145.

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