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Introduction
Standby LC is similar in nature to a Bankers Guarantee; it is usually issued to cover non-performance of a payment obligation in an underlying contract.
Product Features
1) Importers and exporters who have established long-term trading relationship with each other may use a Standby LC as a guarantee to cover payment defaults.
2) Overseas parent company may use Standby LC to assist overseas subsidiaries to obtain credit facilities from banks.
3) Today, Standby LC is quite extensively used in oil trades.
Application requirements
1) Legally registered in Singapore.
2) Maintain current account with our bank.
3) A credit facility must be granted by the bank for the issuance of Standby LC.
4) The format of the Standby LC that is to be issued must be acceptable to the bank(the format is subjected to review by the bank’s Legal Department).
Application Procedures
1. Applicant submits Standby LC application form together with documentary evidence showing the need for the Standby LC eg the commercial contract.
2. The bank evaluates customer and transaction information.
3. The bank checks the Standby LC application and format submitted.
4. The Standby LC is issued against the marking of the credit limit.
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