Benefits
Creditworthy
LC is issued by a AA- rated Issuing Bank.
Payment security
Payment is made upon seller's fulfilment of the terms and conditions.
Financing your import needs
Option to apply for Trust Receipt Financing to improve cashflow.
How does a Letter of Credit work?
Issuance
After the Buyer and Seller establish an agreement, Buyer applies for a Letter of Credit (LC). UOB issues the LC.
Document Presentation
Once goods are shipped, Seller submits documents to their banker. Presenting Bank checks if documents are compliant and sends documents to UOB.
Trust Receipt Financing*
Buyer may apply for post-shipment financing and take possession of the goods on trust.
Payment and Settlement
UOB checks documents for compliance to LC terms. Buyer to provide settlement instruction before documents are released.
How does a Letter of Credit work?
Issuance
After the Buyer and Seller establish an agreement, Buyer applies for a Letter of Credit (LC). UOB issues the LC.
Document Presentation
Once goods are shipped, Seller submits documents to their banker. Presenting Bank checks if documents are compliant and sends documents to UOB.
Trust Receipt Financing*
Buyer may apply for post-shipment financing and take possession of the goods on trust.
Payment and Settlement
UOB checks documents for compliance to LC terms. Buyer to provide settlement instruction before documents are released.
Types of Letter of Credit
Sight LCs
Upon receipt and verification of a complying presentation, the Issuing Bank will make payment.
Usance LCs
Upon receipt and verification of a complying presentation, the Issuing Bank will provide acceptance and make payment on maturity date.
Transferrable LCs
A simple way for resellers to purchase goods by transferring the Issuing Bank's original LC to another beneficiary.
Back to Back (B2B) LCs
A solution involving two LCs to secure financing for a single transaction - one favouring the middleman, another favouring the ultimate seller.
Types of Letter of Credit
Sight LCs
Upon receipt and verification of a complying presentation, the Issuing Bank will make payment.
Usance LCs
Upon receipt and verification of a complying presentation, the Issuing Bank will provide acceptance and make payment on maturity date.
Transferrable LCs
A simple way for resellers to purchase goods by transferring the Issuing Bank's original LC to another beneficiary.
Back to Back (B2B) LCs
A solution involving two LCs to secure financing for a single transaction - one favouring the middleman, another favouring the ultimate seller.
Fees
For fees related to Trade Services, remittance fees and other service fees, please contact your nearest UOB China branch or you can call UOB China at 400 886 2821.
Click here to view Wholesale Banking Cash Management and Trade Finance Service Tariff.
Frequently asked questions
Who are the parties involved in a Letter of Credit?
Applicant
- The Applicant is typically the buyer and the party that initiates the request to the Issuing Bank to issue an LC on its behalf.
Beneficiary
- The Beneficiary is typically the seller and the party who will receive payment if it fulfills all the terms and conditions of the LC.
Issuing Bank
- The Issuing Bank is the Bank that issues the LC in favour of the seller, at the request of the buyer/applicant.
- By issuing an LC, the Issuing Bank undertakes to pay the beneficiary if all the terms and conditions of the LC are complied with.
Advising Bank
- The Advising Bank authenticates the LC received from the Issuing Bank and advises/ notifies the Beneficiary that there is an LC issued in his favour.
Where can I submit an LC application or collect my documents?
You may submit your application or collect your trade documents at any of our Branches. Click here to find the Branch nearest to you.
