Letter of Credit and Domestic Letter of Credit is a promise based on a written request of the Applicant that binding Issuing Bank for:
- Performing payment to the Beneficiary or the order, or accepting and paying money order that is withdrawn by the Beneficiary;
- Giving right to another bank to perform payment to the Beneficiary or the order, or accepting and paying money order that is withdrawn by the Beneficiary; or
- Giving the right to another bank to negotiate money order that is withdrawn by the Beneficiary, of a document submission, as long as the terms and condition of LC or DLC is satisfied.
LC or DLC advising:
After LC or DLC is issued by the Issuing Bank, the Succession Bank will success LC or DLC to the Beneficiary.
LC or DLC Confirmation: the Beneficiary may ask the Confirming Bank to take over the risk payment from the Issuing Bank and also the state risk where the Issuing Bank is located.
LC or DLC Negotiation: the Beneficiary may request to the Nominated Bank to negotiate LC or DLC that has been issued by the Issuing Bank so the funding will be delivered faster.
- For the Applicant:
- Increasing competitiveness by using the Issuing Bank reputation in payment method for commercial transaction.
- Performing payment only if the Beneficiary gives the document matching with the terms and condition of LC or DLC.
- For the Beneficiary:
- Transfering payment risk from the Applicant to the Issuing Bank or Confirming Bank.
- Ensuring payment according to the due date that has been assigned before.
- May request negotiation from the Nominated Bank with competitive interest.
- The risk for the Applicant:
- Risk of accepting a product that is not matched with the order, which can be mitigated with the Certificate of Inspection or Certificate of Analysis document.
- The risk for the Beneficiary:
- Risk of late payment which can be mitigated with the confirmation of LC.
Requirements for the Applicant:
- Having an account in Bank Danamon;
- Signing Credit Agreement for an opening of Letter of Credit/Domestic Letter of Credit Facility.
- Providing a collateral asset as required.
Requirements for the Beneficiary:
- The Beneficiary is a Customer that at least have an account in Bank Danamon.
- The Beneficiary has Credit Agreement for negotiation facility for the Discrepant LC Negotiation and providing a collateral asset as required.
For information/customer service of transaction/banking services, customers may call Hello Danamon on 1-500-090.
- Pricing for every customer may be different depending on the risk level of the customer. All bill will be debited from the customer’s account.
- The total cost will be informed to the customer on the service application and be attached to the signed contract.