Skip to main content
Branches and ATMs
Online banking
Business partners using a tablet to inform about letters of credit and guarantees
Letters of Credit and Guarantees

Letters of Credit and Guarantees

Ensure payment security and reliability in international trade by opening a letter of credit. Use a guarantee whereby the bank assumes the payment obligation if your client fails to fulfill their commitments.

Young couple at a bank meeting, discussing bank letters of credit
Bank Letters of Credit

Bank Letters of Credit – irrevocable payment obligation

By issuing a letter of credit at the client's request, we assume an irrevocable obligation to make payment on the agreed date — negotiating submitted documents in favor of the letter of credit beneficiary, provided the documents proving export execution comply with the predefined terms stated in the letter of credit.

Banker with a young couple at a successful meeting regarding bank guarantees and letters of credit
Letters of Credit and Guarantees

Benefits for both buyer and seller

Issuing a letter of credit means the buyer will receive the goods as agreed, without the risk of paying in advance for something not yet seen. The seller, on the other hand, receives a guarantee of secure payment for delivered goods if they have followed the instructions and terms of the letter of credit.

Professional bankers at a workstation discussing bank guarantees as a security instrument for international trade and payment protection
Guarantees as a security instrument

Guarantees as a security instrument

A guarantee is a security instrument whereby the issuing bank, at the client's request, assumes an irrevocable obligation to pay the specified amount to the guarantee beneficiary as compensation for non-payment or non-performance by its client on whose behalf the bank acts.

Young couple finishing a bank meeting after being informed about letters of credit
Importance of guarantees

Importance of guarantees

Guarantees provide the beneficiary with assurance of compensation from the bank in case of non-performance or non-payment by an unreliable contractual partner. The principal, using their bank’s name, secures a better negotiating position and protection against an unreliable user. 

Collection transactions

Collection transactions involve the purchase of documents presented through banks for quick and efficient monitoring and payment of already completed import/export of goods upon receipt of the necessary documents. The bank monitors the transaction, informs the exporter regarding the payment, enabling simultaneous receipt of essential documents for further handling of the goods. Collection transactions are key to maintaining transparency and security in international business.

Download documents