AYA Letter of Credit

AYA IMPORT LETTER OF CREDIT

Fast and efficient processing of Letter of Credit transactions for international trade settlement by the buyer/importer.

Description of Product
  • Used as a means for international trade settlement by the buyer/importer for importation of goods into Myanmar
  • Letter of Credit (LC) issued by the issuing bank on behalf of the buyer/importer in favour of the seller/exporter
  • LC is an undertaking by the Bank at the request of a Buyer to honour claims by the Seller provided that the documents relating to a shipment of goods are presented within a specified time and in accordance the terms and conditions of the LC
  • LC best where both parties totally does not trust each other and need comfort of a reputable third party e.g. banks
  • Ideal for commercial businesses e.g. trader wholesalers, manufactures, contractors
Benefits for Customers
  • Customer does not have to pay in advance for goods purchased
  • Customer can set conditions in the LC that exporter must be adhered to before settlement is made i.e. ability to control when, how and where the goods are shipped
  • Subject to UCP 600 internationally recognized rules and standards governing LCs.
  • Use of bank expertise and worldwide channels to issue and advice LCs expeditiously and a straight forward process, fast and efficient processing of LC transactions
  • Banks will not make settlement unless correct documentation is presented
  • Possible access to bank finance on presentation of documents
  • Customers can now source for their goods from countries all over the world, even from sellers unknown to them
Key Features
Eligible Customers

Business incorporated in Myanmar
  • Sole–Proprietor or Partnership
  • Limited Company
  • Joint Venture
Available Currencies
  • US Dollar
  • Euro
  • Singapore Dollar
Availability Subject to Approve Facility

LC only available for customer importer who has an approve Facility with the bank. The basis of application for facility may be in two ways:

Transaction Basis (Ad Hoc)
  • Where NO trade line/facility is established
  • Against 100% cash collateral
  • Available on per transaction basis
  • Transaction ends when settlement is made by payment against the cash collateral

 

Permanent Line
  • Where trade line/facility is established
  • Usually against approved collateral e.g. property or fixed deposits.
  • Available on continuing basis
  • Facility subject to yearly review
General Requirements

Customer must
  • Open account with AYA Bank
  • Obtain import permits
  • Availability and sufficiency of foreign currency
  • Approved application for facility and acceptance of standard pricing, terms and conditions for trade facilities
  • Pro-forma invoice, sales contract and agreement on application for LC issuance
Key Terms and Conditions for Issuance of LC
  • Facility shall be confined to sight and tenor of up to 120 days
  • A demand deposit account shall be maintained with the Bank
  • LC is subject to the current Uniform Customs and Practice for Documentary Credits, International Chambers of Commerce in force for the time being (UCP600 currently) and related ICC publications.
  • Documents and the merchandize shipped shall be held by bank as security (hypothecated to bank) until payment is made
  • Bank deals in documents and is not concerned with the fulfilment of the contract between the seller and the buyer.
  • An LC is an engagement of the Bank itself, incapable of cancellation or modification except by consent of the beneficiary. Any amendments or modifications are also subject to the Bank’s approval.
Pricing
Please contact us for more information.
 



AYEYARWADY BANK Branches