Trade finance transactions
TRADE FINANCE TRANSACTIONS ARE THE RELIABILITY AND HIGH BUSINESS REPUTATION!
"Keremet Bank" OJSC serves its clients in the field of international settlements helping them to minimize risks through such documentary operations as bank guarantee and letter of credit.
BANK GUARANTEE is a document confirming the solvency of the company for which the Bank is ready to vouch and guarantees to fulfill monetary obligations under the agreement in case of non-fulfillment of its terms. "Keremet Bank" provides a wide range of bank guarantees taking into account their purpose, timing and other client needs.
TYPES OF BANK GUARANTEES:
- Payment guarantee fulfills obligation to pay for the goods or services provided on credit;
- Advance refund guarantee reimburses the amount of the transferred advance in case of non-delivery of prepaid goods or services;
- Tender (competitive) guarantee prevents cases when company that won the tender does not fulfill the order;
- Contract performance guarantee reimburses the cost of "penalty" for violation of the terms of the contract (in case of non-compliance with the parameters or prescribed characteristics of the goods, refusal of warranty service, etc.);
- Counter-guarantees is the obligation of the Bank to another guarantor bank to financially secure the guarantee offered by it;
- Customs guarantees ensure payment of customs duties and fees by importing enterprises.
ADVANTAGES OF BANK GUARANTEES:
- minimization of risks of non-fulfillment or improper fulfillment of obligations under transactions;
- ability to enter new markets with minimal risk and costs;
- low cost of services in comparison with interest rates on commercial loans;
- ability to work with advance payments without risk of losses in case of unfair performance of the contract;
- guaranteed performance of obligations increases the likelihood of agreeing on more favorable price terms;
- possibility of opening a credit line under bank guarantees at the onset of payment terms without releasing working capital;
- possibility of participation in public tenders and procurement, where the guarantee is a mandatory requirement.
LETTER OF CREDIT is a Bank guarantee to pay seller for goods shipped or services rendered with timely provision of package of transport and commercial documents in accordance with terms of letter of credit. This is a convenient tool as each participant of the transaction has a clear understanding of their rights, obligations and requirements imposed on all participants of the transaction.
ADVANTAGES OF LETTERS OF CREDIT:
- risk insurance in the implementation of foreign economic and domestic trade transactions;
- individual development of letter of credit schemes for needs of each client;
- convenient tool for short-term financing in case of lack of available funds;
- opportunity to get financing on a trade deal with an interest rate lower than interest rate on a loan;
- possibility of control through banks of transaction execution and guarantee of timely payment and delivery of goods;
- if documents do not comply with terms of letter of credit, buyer can refuse to pay for goods.
For more information please contact the Correspondent relations and documentary operations Department by phone +996 (312) 55 44 44 or E-Mail: trade.finance@keremetbank.kg
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