All business dealings, even those made between good friends, require safety, efficacy and mutual respect. Partners in these transactions are primarily the bank and its client. In order to protect the client's interests, the bank is offering its credibility, skills and modern communications technology, both locally and abroad.

The international banking practice has therefore devised payment and security instruments called Documentary Business and Guarantees.

Beneficiaries of Documentary Business products and Guarantees are creditworthy clients:

• Dealing with export and import of goods and services
• Dealing with sale of goods and services in the country

Products included in Documentary Business and Guarantees are Documentary Collections, Letters of Credit and Guarantees.

Documentary Collection includes purchase of documents by the beneficiaries, which are presented through banks, which allows fast and efficient monitoring and payment of the imported/exported goods along with all necessary documents for further handling with goods. This instrument is recommended for the transactions between long-standing partners.

The bank, as a mediator, allows synchronized payment operations and receipt of documents.

Letter of Credit (L/C) is both a payment and security instrument.

In banking practice, L/C is a most widely used banking product in international transactions.

By issuing Letter of Credit, the issuing bank undertakes, upon its client's order, an irrevocable liability to pay and/or negotiate on the agreed date the submitted documents in favor of the beneficiary of the Letter of Credit, provided the presented export documents are in line with the terms of L/C wording.

This instrument provides safety, both to the buyer of the goods or services and the seller.

Benefits for buyers: obtaining goods as agreed, without risk to pay something in advance before seeing it.

Benefits for sellers: safe collection of the delivered goods if in line with the instructions and terms specified in the letter of credit.

This instrument is subject to the widely recognized customs and practice (Uniform Customs and Practice for Documentary Credits - UCP 600, adopted by the International Chamber of Commerce in Paris and verified by almost all countries in the world).

If you sell goods, render a service, participate in a tender, perform works, buy upon advance payment, design, install new equipment – in one word, if you are in business, we recommend you to secure your operations under guarantees.

Guarantee is a security instrument under which the issuing bank undertakes, at the client's request, an irrevocable liability to pay on demand the agreed amount to the guarantee beneficiary as reimbursement for any non-payment or non-performance by its client in favor of which the bank is acting.

There are various types of guarantees, such as:

• Customs guarantee
• Advance Payment Guarantee
• Bid Bond
• Performance Bond
• Payment Guarantee
• Loan Repayment Guarantee, etc.

Benefits for the beneficiary: In all its forms, guarantee provides safety to the beneficiary that he/she shall be compensated by the bank for any non-performance or non-payment by a negligent contractual partner.

Benefits for the principal:The principal ensures, by using the name of his bank, a better position and better negotiating conditions and is protected against negligent beneficiary.

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