Standby Letter

of Credit for Importers

Types of SBLC's

A Standby Letter of Credit (SBLC) offers importers a financial safety net and enhanced flexibility in international dealings. This financial guarantee, issued by the bank on behalf of the importer, ensures that payment will be made to the exporter in the event the importer does not meet the contractual terms. Here’s why importers utilize it and the main advantages it provides:

  • Import SBLC

    An Import Standby Letter of Credit (SBLC) is a type of financial instrument used in international trade where a buyer (importer) arranges for a standby letter of credit (SBLC) to guarantee payment to a seller (exporter). The SBLC serves as a backup payment method in case the buyer fails to fulfill their contractual obligations. It is often used in situations where the buyer’s creditworthiness needs to be verified or when the seller requires additional security

  • Revolving SBLC

    A Revolving Standby Letter of Credit (Revolving SBLC) is a financial instrument that works similarly to a standard Standby Letter of Credit (SBLC) but with a unique feature: it automatically replenishes after each drawing, allowing it to be used multiple times within a specified period without the need to issue a new SBLC each time.

  • Pre Advice MT799


    The MT799 is a SWIFT message used in international trade finance to provide a Pre-Advice of Letter of Credit (LC) or to convey other financial information between banks. It is a free-format message and does not serve as a final, binding financial instrument like a Letter of Credit itself. Instead, it serves as an informal notification to a beneficiary (usually the seller or exporter) that a Letter of Credit or other financial arrangements are being initiated or that there are important updates regarding a trade transaction.

  • Issuance Procedure For SBLC

    Our modus operandi is standard banking practices and is transparent as stated below:


    • Client will send us the Filled, Signed and Sealed SBLC application form (attached below) along with supporting documents like Copy of contract between Applicant and Beneficiary. We will prepare and send the draft of SBLC as per the application form and the underlying document requirement.
    • Client should conclude with their Beneficiary using the draft provided by us. Once the draft is concluded, Client should send us the following:
    1. Final draft with their sign and seal;
    2. Letter of Interest confirming acceptance for the draft and advising us to proceed further;
    3. Their Bank statement evidencing the availability of funds to cover the issuing cost.
    • Upon receiving the above stated 3 documents, the standard Indemnity Documents to be signed by the individual directors/shareholders, Board resolution to be signed by all directors/shareholders, Bill of Exchange to be signed by the authorised signatory, source of funds to be signed by authorised signatory and application and agreement to be signed by the authorised signatory, all these will be provided to the Client.
    • The Client has to submit the KYC documents as per the list we provide as a part of KYC and AML compliances.
    • Also an eKYC declaration letter will be given to Client, which needs to signed and sealed and sent back to us.
    • Once we receive the Signed eKYC declaration letter, we will issue an invoice of 1,500 USD for eKYC which client needs to pay.
    • Upon receipt of this payment we will release a eKYC link to client
    • Client needs to submit all the signed and sealed filled up documents, on the eKYC link/portal shared by us after which our KYC and Compliance team will review the documents.
    • Our KYC & compliance team will confirm if the submitted documents are in order and if yes, we will issue an invoice to Applicant, from the Bank towards the issuing fees (which is non-refundable after issuance of the instrument to the beneficiary bank)
    • After Client transfers the issuance fees, within 7 - 10 banking days we will get the instrument issued and it will be delivered to the Supplier/Beneficiary bank.
    • End of transaction up to issuance.

1. Risk Protection and Payment Assurance

An SBLC serves as a backup payment mechanism, offering exporters assurance of payment even if the importer defaults. This is particularly useful in high-value transactions or when dealing with new suppliers who may require extra security before extending credit.


2. Strengthens Negotiating Power

Having an SBLC in place demonstrates the importer's financial credibility, which helps in negotiating better terms with suppliers. Suppliers may be more willing to offer favorable terms, like extended payment deadlines, knowing there’s a bank-guaranteed payment if the importer defaults.


3. Preserves Cash Flow

With an SBLC, importers do not need to prepay or put funds in escrow. The bank covers the payment in the event of non-performance, allowing importers to maintain their cash flow for other business needs until the transaction is complete.


4. Global Recognition and Legal Framework

Like other letters of credit, SBLCs are regulated under the International Chamber of Commerce’s rules, which provides a structured framework recognized worldwide. This standardization makes the SBLC an effective tool for international trade, providing both legal protection and streamlined dispute resolution.


5. Flexibility and Versatility

SBLCs can cover various contingencies beyond payment, including performance-based guarantees. For example, they can be used if the importer fails to deliver goods on time, which makes them adaptable to complex contract terms across industries.


Overall, an SBLC helps importers manage risk, maintain liquidity, and reassure suppliers, facilitating smoother and more secure international trade transactions.