Credins Bank Sha will further on support its customers with the operations of Trade Finance instruments.

Given the experience and expertise of our staff on these transactions, as well as the broad network of well-known Corresponding Banks in Europe, with which our Bank cooperates, we shall be very close to our customers, minimizing the international trade related risks, and reaching partners wherever they are.

Our specialized staff provides consulting and drafting of Letters of Credit and Bank Guarantees according to the Uniform International Rules on operation of these instruments. Their text is personalized and tailored made based on your business and the terms agreed in the contract with your partners. Furthermore, special importance is given to the control of Letter of Credit documents as well as any potential claims regarding Bank Guarantees, in accordance with the Rules of Functioning and the conditions set out in these instruments.

Credins Bank Sha offers operation with the instruments of Letters of Credit, Bank Guarantees and Documentary Collection /Inkaso also through financing/support with the Bank’s funds, in addition to the relevant analyzes and approvals, if the Client is unable to make available his/her funds, at the time of their opening.

What are Letters of Credit?

Letter of Credit (L/C) or Documentary Credit is a payment mechanism. It is one of the most moderate and safe forms of payment widely used in international trade.

Letter of Credit, as a payment instrument, represents the bank commitment of the Applicant’s Bank to pay the Beneficiary through his Bank, by submitting to the Bank the documents, sale of goods/services, which must be in accordance with the conditions set out in the L/C.

Depending on the position of our Bank’s Client, in their business relationship, L/C may be:

  • Import L/C – our customer is the Buyer of the goods/service, in which case L/C will be opened by our Bank and the Customer will be the L/C Applicant;
  • Export L/C – our customer is the Seller of the goods/service, in which case L/C will be opened by the Buyer’s Bank and shall be notified by our Bank in favor of our Customer, who in this case will be the L/C Beneficiary.

Main issues of L/C functioning:

  • L/C operates and is subject to Uniform Customs and Practice for Documentary Credits (UCPDC ICC Publication No. 600, Audit Revision ‘2007).
  • L/C is opened and refers to the agreement between the parties but in any case is not related to the transaction of goods/services.


L/C is used in international trade, without excluding its use within the country, as it provides security and advantages for the parties involved in the agreement, by minimizing the risks related to the trade of goods/services, at various distances and places:

  • The Seller (L/C Beneficiary) starts the production / delivery of the product / service upon receiving and accepting L/C in his favor, making sure that the payment will be made by the Bank of the Buyer – L/C Applicant, by filling in and submitting the required documents in accordance with L/C terms and conditions. In this case, the Bank is responsible for the payment and the L/C Buyer – Applicant shall not be an obstacle;
  • The Buyer (L/C Applicant) is also confident that the Bank will be make the payment only if the Seller (L/C Beneficiary) provides the Bank with the set of required documents and if they comply with L/C terms and conditions.

What is the Bank Guarantee?

The Bank Guarantee is an irrevocable written commitment of the issuing Bank (Guarantor), issued on behalf of the Applicant and in favor of the Beneficiary, to make the payment up to the amount specified in the guarantee, in favor of the Beneficiary, upon receiving from the Beneficiary a regular request for payment in writing, in case the Applicant fails to fulfill the obligation that is subject of this guarantee.

The main types of Bank Guarantees that can be issued are as follows:

  • Bid Guarantee – issued for participating in tender;
  • Contract /Performance Guarantee – issued to guarantee fulfillment of contractual/performance obligations;
  • Advance Payment Guarantee – issued to guarantee the use of the advance payment amount in accordance with the contract;
  • Payment Guarantee – issued to guarantee payment of goods and services in favor of the beneficiary;
  • Credit Line Guarantee – issued to guarantee Credit Line payments allocated to a client.
  • Etc.
  • Stand By Letter Of Credit: is a special type of Bank Guarantee, that meets the same purposes as the Guarantee. Unlike guarantees, the rules applicable to Stand By Letters of Credit are the ‘Standard Rules and Practice for Documentary Credits (UCP no.600), International Chamber of Commerce Publication, Paris, 2007’ Publication or Standby International Rules (ISP98 International Standby Practices 98).

Main issues of Bank Guarantee Functionint:

  • Bank Guarantee operates and is subject to the Uniform Rules for Demand Guarantees (URDG), ICC Publication No. 758 year 2010.
  • Banks are not involved in disputes that may arise between the Applicant and the Beneficiary from the obligations/commitments that the parties have in the agreement regarding the goods/services or their performance.


The Bank Guarantee provides security for meeting the terms and conditions of the contract for which the Bank Guarantee is issued.

  • The Bank Guarantee covers the risk of failure to pay in due time, of the Applicant’s Contractual Liabilities to the Guarantee Beneficiary.
  • Upon issuance, the Guarantee receives and carries legal force.

What is Incaso:

Documentary Collection or Inkaso is a payment instrument, according to which, a Bank collects payment on behalf of the Seller/Exporter upon delivery of goods documents to the Buyer/Importer, according to the conditions set out in the documents delivered.

This instrument is suitable when there is a stable and reliable business relationship between the Exporter and the Importer, when the Exporter has no doubts about the Importer’s solvency and the Importer has the Trust of the Exporter

Main issues of Incaso functioning (Documentary Collection)

  • Documentary Collection or Inkaso, operates and is subject to Uniform Rules: URC 522 – Uniform Rules for Collections, published by the International Chamber of Commerce – ICC, Paris, France.
  • Banks only mediate fulfillment of payment instructions, but are not responsible for checking the exporter’s documents, or for disputes that may arise between the Exporter and the Importer.
  • Payment methods are as follows:
    • P/D – Submission of documents upon Immediate Payment by the Importer;
    • A/D – Submission of documents upon its Acceptance to make payment on a later date.


This form of payment is appropriate in the following cases:

  • When there is a stable relationship between the Exporter and the Importer and when the Exporter has no doubts about the Importer’s solvency;
  • If the political, economic situation in the Importer’s country is considered stable and if there are no import restrictions.
  • Easier procedures and lower costs, Banks have no prior obligation to pay.

Credit Letters are payment instruments that help clients in international trade transactions. These instruments are necessary due to the security needs of both parties, the exporting and importing ones.

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