Financial Instruments

We have at our disposal a sophisticated network of financial professionals who can expertly guide you through the various processes and recommend various financial instruments such as LC’s, BG’s, SBLC’s & MTN’s

What Are Bank Instruments?

This is a commitment in form of writing issued by a Bank to pay a particular sum of money to a beneficiary on behalf of a Banks Customer in a situation where the Customer/Purchaser do not have the ability to pay or perform its obligation financially to the Seller.

The fact that a Bank’s Customer can use a Bank Instrument in a transaction is a show that the individual has proof of strong credibility financially, and is also capable of repaying.

However, it is important to know that though the Bank is in charge of the paperwork of the Bank Instrument, and it does not have any say in the development of the contract or even in the commitment to it. It’s only the Bank Instrument and the Terms and Policies associated with it, that is of interest to the Bank.

What Are The Most Commonly Used Bank Instruments?

There are numerous choices of Financial Instruments we provide for our customers, through our Preferred Professional Network. The most commonly used Banking Instruments to this day would be a “Letter of Credit’ (LC), “Standby Letter of Credit” (SBLC), “Bank Draft” (Cashier Check), “Bank Guarantee” (BG), and a “Documentary Letter of Credit” (DCL).

What is a Standby Letter of Credit (SBLC)?

A Standby Letter of Credit, abbreviated as SBLC, refers to a legal document where a Bank guarantees the payment of a specific amount of money to a Seller if the Buyer defaults on the agreement.

An SBLC acts as a safety net for the payment of a shipment of physical goods or completed service to the Seller, in the event something unforeseen prevents the Buyer from making the scheduled payments to the Seller. In such a case, the SBLC ensures the required payments are made to the Seller after fulfillment of the required obligations.

What is a Bank Guarantee (BG)?

Bank Guarantee is an assurance that a Bank provides to a contract between two external parties, a Buyer and a Seller, or in relation to the Guarantee, an Applicant and a Beneficiary. The Bank Guarantee serves as a Risk Management tool for the Beneficiary, as the Bank assumes liability for completion of the contract should the Buyer default on their debt or obligation.

What is a Letter of Credit (LC)?

Letter of Credit, or “Credit Letter,” is a Letter from a Bank guaranteeing that a Buyer’s payment to a Seller will be received on time and for the correct amount. In the event that the Buyer is unable to make a payment on the purchase, the Bank will be required to cover the full or remaining amount of the purchase.

Due to the nature of international dealings, including factors such as distance, differing laws in each country, and difficulty in knowing each party personally, the use of a Letter of Credit has become a very important aspect of International Trade.


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