Documentary credits are used to facilitate local and international trade.
They are irrevocable commitments by the bank, where the letters of credit issued by the bank on behalf of the client guarantee payment for the suppliers' dues with whom they deal. At the same time, it ensures that the client meets all agreed-upon terms with the suppliers as per the credit.
A documentary credit gives you the ability to negotiate better prices with suppliers, as Alinma Bank ensures the payment process for the goods and guarantees that the credit documents are delivered only if accepted or paid according to the agreed commercial terms.
Import Credit:
Alinma Bank issues a letter in favor of the beneficiary (exporter/seller) on behalf of the applicant (importer/buyer). The bank commits to pay or accept payment against the mentioned commercial documents per the terms of the letter of credit. We at Alinma Bank issue, amend, and confirm payment either upon delivery or upon acceptance of the letter of credit through a broad network of banks we work with.
Advantages:
- The importer is assured that payment will only be made if the exporter meets all the documents mentioned in the letter of credit.
- Security for the exporter in case of risks related to political conditions.
- The importer is informed immediately upon receipt of the documents.
- Enhances the importer’s negotiating position by guaranteeing payment through Alinma Bank.
Terms and Conditions:
- A current account at Alinma Bank.
- Coverage of the documentary credit value through the current account or credit facilities.
- Submission of a request for issuing a documentary credit.
- Payment of documentary credit issuance fees.
Participating Import Credit:
A participating credit is a documentary credit issued by Alinma Bank in favor of the beneficiary (exporter) on behalf of the applicant (importer). The bank commits to accepting payment against the commercial documents per the terms of the letter of credit. Participating credit is a limited partnership between the bank and the client for importing goods and equipment for the client’s benefit. In this type of transaction, the client contributes part of the required import amount, while the bank contributes the remaining amount, and then a letter of credit is issued to facilitate the import of goods and equipment. The client purchases their share from the bank upon the arrival of the credit documents at an agreed price.
Advantages:
- Your contribution as an importer to part of the required import amount.
- Your assurance as an importer that payment will only be made if the exporter fulfills the terms and conditions of the letter of credit.
- As an importer, you can purchase your share of the participation upon the arrival of the credit documents at an agreed deferred price between the bank and the client.
- You will be informed as an importer immediately upon receipt of the documents.
- Enhances your negotiating position as an importer by guaranteeing payment through us.
Services Offered by the Bank:
At Alinma Bank, we issue, amend, and confirm payment upon receipt and acceptance of letters of credit through a wide network of cooperating banks.
Terms and Conditions:
- A current account at Alinma Bank.
- Availability of credit facilities.
- Submission of a request for issuing a documentary credit.
- Payment of documentary credit issuance fees.
Export Credit:
Alinma Bank notifies the beneficiary of the documentary credit (the bank's client) of the credit or its amendments. The bank also provides advice, negotiates, examines documents, and takes on the task of collection from the issuing bank through its extensive network.
Advantages:
- Export credit is used when the exporter is unfamiliar with the importer or does not want to face risks in the importer’s country. The credit is also suitable for those who need to manage their trade and avoid potential risks of global trade.
- The bank can add its enhancement to the export credit upon request from the beneficiary according to the terms and conditions of the credit.
Terms and Conditions:
- A current account at Alinma Bank.