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Trade Finance

Today's economic and financial conditions have specific requirements for reliability calculations in international trade and the availability of competitive funding.
Being one of the major well-established prestigious foreign Banks in Uzbekistan, “KDB Bank Uzbekistan” in partnership with other well-known foreign partner banks provides the most advanced forms of documentary payments and trade finance instruments based on international financial practices.

The main task of the Trade Finance Department of the Bank is to provide high quality, timely and efficient trade finance operation services to corporate customers. Trade Finance Department operates strongly under a range of legislative and normative documents of Republic of Uzbekistan and with international rules such as Uniform Customs and Practice for Documentary Credits (ICC publication number 600, edition 2007), Uniform Rules on Safeguards of the International Chamber of Commerce, INCOTERMS 2010 and others.

The Bank offers a wide range of services in:

  • Export and Import Letters of credit;
  • Bank guarantees;
  • Documentary Collection form of calculations.

Documentary letter of credit - is a monetary obligation of the bank that opens the letter of credit (the issuing bank) to pay the agreed amount to the seller on behalf of the buyer, upon receipt of the documents specified in the letter of credit.

The Bank deals with following operations under Letters of credit:

  • Opening several types of Letters of credit, including irrevocable, transferable, confirmed, etc.);
  • Amendment to the terms and conditions of issued Letters of credit (including extension and increase the amount of L/Cs );
  • Confirmation of letters of credit issued by leading foreign banks;
  • Receipt and verification of the documents under import L/Cs received from the nominated banks;
  • Advising and execution of export Letters of credit;
  • Check documents presented by beneficiary under export Letters of credit and dispatching shipping documents to the issuing bank;
  • Give detailed consultation regarding trade finance operations to customers and authorized bodies.

Issuing and servicing of letters of credit is regulated by the Uniform Customs and Practice for Documentary Credits, 2006 revision (ICC publication # 600)

The followings are necessary forms of documents to open import Letters of credit:

  • Application on opening Letter of Credit filled up by a customer (form #1) ;
  • Copy of Import contract concluded between the customer and its foreign partner (as an applicant and beneficiary);
  • Other relevant documents (conversion history, statement of account from other banks, protocols, etc.).

Bank Guarantee is a guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank will cover it.

We offer you several types of Bank guarantees:

  • A payment guarantee is used to guarantee the seller that the buyer will fulfill its payment obligations as stated in the contract;
  • A tender guarantee (bid bond) is used for participation in international tenders, such a guarantee covers the organizers’ expenses in case when a participant revokes its bid or does not accept the offer;
  • A performance guarantee is used to strengthen the contractual relationship between a buyer and a seller. It guarantees compensation of the agreed-upon amount in case the delivery terms or other contractual obligations of the seller are not fulfilled as agreed upon in the contract;
  • An advance payment guarantee is used when the contract provides an advance payment that will be paid to the seller. This guarantees the return of the advance payment to the buyer if the seller does not fulfill its contractual obligations to supply goods or services;
  • Guarantees against Counter guarantees of the other banks. It happens when, by law, a foreign bank even of good or best standing, is not authorized to issue a guarantee in favor of resident in a specific Country but only allowed to instruct a local bank to issue a bank guarantee on its behalf.

Documentary collection is a process, in which the seller instructs his bank to forward documents related to the export of goods to the buyer's bank with a request to present these documents to the buyer for a payment, indicating when and on what conditions these documents can be released to the buyer.

The following should be present for proper use of documentary collection:

  • the guaranteed ability and desire of the buyer to pay;
  • stable political and economic conditions in the importer’s country;
  • no difficulties in obtaining necessary licenses and the absence of such import limits as currency control in the importer’s country.

Execution of documentary collection operations is regulated by the Uniform Rules for Collections, revision 1995 (ICC publication # 522).

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