A Documentary Credit or letter of credit is an international payment instrument which consists of a binding commitment taken on by a Bank, on the order of the purchaser/payer, to pay a set amount (at sight or deferred) to the seller/beneficiary, against presentation within the envisaged deadline of the documents requested and which conform with the indications in the credit itself.
Documentary Credits are by their nature transactions that are autonomous as regards the underlying commercial transaction.
The Bank verifies the conformity of the documentation presented by the beneficiary to the terms and conditions established in the Documentary Credit only from a formal viewpoint.
Confirmed Documentary Credit: the Bank of the beneficiary (seller) adds, at the request or authorisation of the Issuing Bank, its commitment, as well that of the Issuing Bank, to make the payment to the beneficiary on presentation of compliant documents. The confirmation covers the beneficiary against the risk of insolvency of the Issuing Bank and of the foreign Country.
A particular form of Documentary credit is the Standby Letter of Credit, which is different owing to its function as a guarantee, since it is not used to obtain the regular payment for the export, but only if the debtor should not settle the transaction in the contractually established terms
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Advertising message for promotional purposes. The contractual conditions are indicated in the Information Sheets made available to the public at the bank branches and in the "Transparency" section of the website. The granting of the financing is left to the discretion of the bank, after checking the necessary requirements of the applicant.