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Letter of Credit-i

Letter of Credit-i

Letter of Credit-i (LC-i) is a type of payment method for settlement of domestic and international trade transactions. It is also known as a Documentary Credit.

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Over-The-Counter Letter of Credit-i

Over-The-Counter Letter of Credit-i

Over-The-Counter Letter of Credit-i (OTCLC-i) is similar to the normal Letter of Credit-i issued by the Bank except that it is issued at the counters on behalf of those companies and individuals against cash margin or Islamic Term deposit as collateral.

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Standby Letter of Credit-i

Standby Letter of Credit-i

Standby Letter of Credit-i (SBLC-i) is a legal promise (undertaking), made by a Bank (Issuer) on behalf of its customer to cover the Beneficiary as a result of the failure of the customer to perform his/her part of an agreement with the Beneficiary.

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Transferable Letter of Credit-i

Transferable Letter of Credit-i

Transferable Letter of Credit-i (TLC-i) is a Letter of Credit that specifically states it is transferable and may be made available in whole or in part to another beneficiary (2nd beneficiary) at the request of the 1st beneficiary, usually known as middleman.

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Confirmed Letter of Credit-i

Confirmed Letter of Credit-i

Letters of Credit issued by unfamiliar banks located in unfamiliar regions may pose a risk to the exporter.

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Advising Letter of Credit-i

Advising Letter of Credit-i

RHB Islamic Bank facilitates your export transactions by advising Letter of Credit issued by your buyer's banks in your favor. Letter of Credit is advised to you promptly.

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Inward Bills for Collection-i

Inward Bills for Collection-i

Inward Bills for Collection-i (IBC-i) is based on the contract of Wakalah, stipulating an agency relationship where RHB Islamic Bank is appointed to act as an agent on behalf of the Seller's Bank.

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Outward Bills for Collection-i

Outward Bills for Collection-i

Outward Bills for Collection-i (OBC-i) is for the purpose of handling of domestic sales and export documents presented to the RHB Islamic Bank by the seller/exporter to collect payment from the buyer/importer through Collecting Bank.

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Bank Guarantee-i

Bank Guarantee-i

Bank Guarantee-i (BG-i) allows you to expand your businesses or enter into dealings where your counterpart requires BG-i as part of the business arrangement.

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Over-The-Counter Bank Guarantee-i

Over-The-Counter Bank Guarantee-i

Over-The-Counter Bank Guarantee-i (OTCBG-i) is similar to the normal bank guarantee issued by the Bank except that it is issued at the counters on behalf of those companies and individuals against cash margin or Islamic Term deposit as collateral.

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Shipping Guarantee-i

Shipping Guarantee-i

Shipping Guarantee-i (SG-i) allows you to obtain the goods from shipping company in the absence of Bills of Lading, which can happen in the event of delay in documents received or documents lost/misplaced in transit.

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Advance Endorsement-i

Advance Endorsement-i

Advance Endorsement-i (AE-i) allows you to claim the goods prior to receiving the complete set of import documents from the Bank. By claiming the goods earlier, the buyer/ applicant will be able to avoid demurrage charges if the goods are left at the port or warehouse exceeding the stipulated period from the day it arrives.

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Letter of Credit-i

  • It is a written undertaking given by a bank (issuing bank) to the seller (beneficiary), at the request and on the instruction of the buyer (applicant), to pay at sight or at a determinable future date up to a stated sum of money within a prescribed time limit and against presentation of stipulated documents which are in compliance with the terms and conditions of the LC-i and subject to current Uniform Customs and Practice for Documentary Credits (current version is UCP600).

Over-The-Counter Letter of Credit-i

  • The security/collateral will be 100% cash margin in Ringgit/foreign currency through earmarking of Multi Currency Account or Islamic Term deposit placed with the Bank in the currency of the OTCLC-i.

  • OTCLC-i is provided under Shariah principle of Wakalah

Standby Letter of Credit-i

  • SBLC-i represents an obligation to the Beneficiary (Exporter) on the part of the Issuing Bank to make payment for the following:
    - Utilized facility by the applicant or advanced to or for the account of the applicant
    - For account of any indebtedness undertaken by the applicant
    - For account of any default by the applicant in the performance of an obligation

  • SBLC-i is provided under Shariah principle of Kafalah

Transferable Letter of Credit-i

  • It is normally used when the middleman does not supply the goods himself and wishes to transfer part or all of his rights and obligations to the actual supplier (2nd beneficiary)

  • TLC-i is provided under Shariah principle of Wakalah

Confirmed Letter of Credit-i

  • Payments may not be guaranteed if the bank's credit worthiness is questionable or the bank is located in an unstable country

  • RHB Islamic Bank can help the exporter mitigate bank and country risks by adding confirmation to your Letter of Credit

  • Adding RHB Islamic Bank's confirmation to the Letter of Credit allows RHB Islamic Bank to guarantee payment to the exporter upon presentation of compliant documents

  • Therefore RHB Islamic Bank eliminates bank and country risk and the exporter is assured of payment at all times

  • CLC-i is provided under Shariah principle of Wakalah

Advising Letter of Credit-i

  • RHB Islamic Bank's extensive network of correspondent agents allows us to authenticate and advise the same Letter of Credit in the most efficient manner. This ensures the authenticity of the Letter of Credit and enables the exporter to prepare for the shipment with confidence
  • If your buyer's bank is not our correspondent, we will arrange an agency arrangement to facilitate trade between your buyer and yourselves
  • Once received, RHB Islamic Bank will select the most expedient method of delivering the Letter of Credit to you
  • ALC-i is provided under Shariah principle of Wakalah

Inward Bills for Collection-i

  • Documents are channeled by the Seller through his/her Banker to RHB Islamic Bank for presentation of the documents to the Buyer

  • In exchange of the documents, the Buyer is expected to pay either at sight or accept to pay on a future date. RHB Islamic Bank is acting as the Collection Agent of the Remitting Bank (Seller's Bank)

Outward Bills for Collection-i

  • The Remitting Bank will dispatch the documents and collection instruction to its correspondent agent (the Collecting Bank) for presentation to the buyer/importer for payment of the bill
  • Both the Remitting Bank and the Collecting Bank act as an agent for the seller/exporter (i.e. the principal)
  • The buyer/importer will be required to make payment or accept the Bills of Exchange (BE) before he/she can take possession of the goods
  • OBC-i is provided under Shariah principle of Wakalah

Bank Guarantee-i

  • When issuing the BG-i, RHB Islamic Bank provides guarantee to your counterpart that we will pay them to cover their losses in the event of default, breach of contract or non-performance by you. BG-i would act as an added comfort to your counterpart that you will live up to your obligation in the business dealing you have with them
  • BG-i is provided under Shariah principle of Kafalah

Over-The-Counter Bank Guarantee-i

  • The security / collateral will be 100% cash margin in Ringgit / foreign currency through earmarking of Multi Currency Account or Islamic Term deposit placed with the Bank in the currency of the OTCBG-i
  • OTCBG-i provided under Shariah principle of Kafalah

Shipping Guarantee-i

  • SG-i would prevent delay in clearing and getting your goods even if you have not received the shipping documents yet

  • SG-i is provided under the Shariah principle of Kafalah

Advance Endorsement-i

  • Enables you (the importer) to take delivery of the goods immediately
  • Eliminates storage, demurrage and handling charges
  • Avoid possible losses due to deteriorating condition of the goods

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