Import Documentary Credit

An Import Documentary Credit is a settlement method where CEXIM issues a conditional payment undertaking to the beneficiary upon application from the importer (our customer), and promises to carry out the payment undertaking to the exporter on the complying documents presented within a specified time.  

Our Service: Issue of documentary credits (sight, deferred payment, acceptance, negotiation, confirmation, transferrable, revolving and reciprocal documentary credits), amendment, examination of documents, payment/acceptance or dishonor and etc; assistance for the importer to investigate the exporter’s credit standing, stock and shipment information; finance services such as import bill advance, carrier indemnity. 

Benefits for Importers 

Facilitating a Deal: The participation of the bank solves the lack of trust between importers and exporters, thus greatly enhancing the chance to sign a contract; 

Improving the Bargaining Power: A documentary credit secures the businesses by bank credit instead of commercial credit, thus enhancing the importer’s bargaining power; 

Securing the Delivery of Goods: A documentary credit enables the importer to obtain the documents for goods on payment and its terms can keep the quality, quantity and shipment date of goods under control; 

Reducing the Funds Tied Up: The importer can pay the deposit partly during the issue of documentary credit and pay the balance later for the release of documents. Under a usance documentary credit, the importer can borrow the documents from the issuing bank by trust receipt and resale the goods before the payment on the maturity date, reducing the funds tied up in the business. 

When Do You Choose Import Documentary credits? 

The commodity to be traded is in a seller’s market and the exporter requires settlement by documentary credit; 

Both the importer and the exporter wish each other to be bound to carry out the duty in the trade; 

Both the importer and the exporter wish to finance more working capital to solve the lack of cash. 

Tips 

Before applying for issuing documentary credit in our bank, kindly note that a covering credit limit or the deposit of cash cover is required; 

Please provide the following documents: application form for issue of documentary credit, commercial contract, other documents required by the regulators (if needed), etc; 

Compared with documentary collection and remittance, you will bear more bank charges under import documentary credit. Therefore, you are suggested to require the exporter to offer a discount on the price or other facilities in the contract.