Letters of Guarantee
These are non-cash loans in foreign currency addressing foreign-based persons or legal entities.
Letters of guarantee are issued by our bank for entrepreneurs who do construction, installation, assembly, engineering, projects, consulting and transportation work abroad or to guarantee shipment/delivery of goods purchased by foreign buyers in cash.
Entrepreneurs can participate in auctions abroad by themselves or by forming an ordinary partnership with a local company in that country. Banks can issue guarantee for such ordinary partnerships, as well.
Letters of Credit
Our Bank guarantees that in import transactions, in exchange of the amount paid or to be paid by the importing company at maturity, goods (at desired quality) are bought and the exporter collects the value of the goods under specified conditions.
By means of a bank in the country of the exporter, the bank of the buyer verifies that the goods are sent in a specific time period and pledges payment to the seller in exchange of documents.
This system involving payment in exchange of documents, transferring the control and ownership of goods and the idea of establishing banks as entities of trust is used in international trade as a reliable payment method for buyers and suppliers.
Acceptance loans concern a time draft drawn on a bank by the importer and accepted by the bank. The bank promises to pay the draft at maturity. Our bank signs and accepts drafts where there is a period of at most 1 year before maturity.
In import transactions, payments against goods, payments against documents and payments by letters of credit are bound to drafts under our banks guarantee and become promissory notes. In the event that the drafts are accepted by the importing bank, drafts can be discounted in any bank and hence the payment can be collected in advance.