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Business

Discounting of documents for an export L/C

If you are selling goods and settling accounts under an export L/C, by discounting documents which you provided against the export L/C the bank gives you the chance to receive funds for sold goods prior to the previously agreed maturity. This method of financing current assets is called discounting of export L/C documents.
 

Advantages

Buyers can obtain a trade credit (deferred payment) whereas for sellers discounting is the opportunity to:

  • meet their need for current assets because even when payment for goods is postponed, the seller is paid right after dispatching goods to the buyer
  • increase turnover of goods and make new contracts
  • improve their company’s financial standing by minimising buyer debts
  • reduce debt administration costs

Risk

The bank can ask the seller to repay the financing amount should it receive information from the buyer's bank that the payment is being suspended due to litigation.

How is the service provided?


Contact

ASSET MANAGEMENT AND TRADE FINANCING DEPARTMENT

Business Customer Support Unit

Tel. (8 5) 268 1380

 

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