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Documentary Operations

The letter of credit is a widely used, reliable payment method which represents an irrevocable undertaking of the issuing bank to make payment to the person specified in the letter of credit, referred to as the beneficiary, against the presentation of a certain set of documents, complying with the terms and conditions of the letter of credit.

The advantages for customers when choosing the letter of credit compared to other payment methods such as advance funds transfers and collections are: 

  • The letter of credit provides the seller with the certainty of receiving payment after the fulfillment of the letter of credit terms and conditions;
  • The letter of credit provides the buyer with the certainty that the payment will be effected only upon the presentation of the stipulated commercial and shipping documents in case of full compliance with the documentary terms and conditions;
  • The letter of credit is one of the most commonly used methods of payment in international trade providing different options for the conclusion of import, export or mediatory commercial deals. It is a particularly suitable method of payment between counterparties that do not know each other well;
  • Letters of credit are regulated by unified international rules called “Uniform Customs and Practice for Documentary Credit”, which provide for the interests of all parties under the letter of credit.

Fibank opens and processes documentary letters of credit in Bulgarian Leva and foreign currency by offering a wide range of documentary operations to its customers including:

  • Import letters of credit;
  • Export letters of credit;
  • Transferable letters of credit;
  • Arranging the confirmation of letters of credit by first-rate banks;
  • Discounting of expected future receipts under letters of credit on completed export deals;
  • Assignment of the proceeds of the expected future receipts under documentary credits.

Fibank has established a wide network of correspondent banks and services documentary credit transactions in almost all parts of the world.

Fibank has highly qualified specialists in the field of documentary transactions who are at the customers’ disposal to consult them on the preparation of the conditions of their letters of credit.

In its activity of letters of credit processing Fibank adheres to the “Uniform Customs and Practice for Documentary Credits”, 2007 revision, publication No 600 of the ICC, Paris in conformity with the effective Bulgarian legislation, the Bank’s interior regulations and the common international banking practice.

In its nature the bank guarantee represents an irrevocable commitment of the Bank under which it undertakes in writing the obligation to pay to the person specified in the letter of guarantee a specific amount upon a claim and under the conditions stipulated therein.

Fibank issues all types of bank guarantees on behalf of its customers:

  1. Direct bank guarantees issued directly in favor of foreign companies;
  2. Indirect bank guarantees – a foreign correspondent bank issues a domestic guarantee in favor of a foreign company on the basis of a counter-guarantee issued by Fibank;
  3. Fibank receives and advises bank guarantess from abroad in favor of its customers;
  4. Fibank issues domestic letters of guarantee in favor of its customers on the basis of counter-guarantees received from foreign correspondent banks.

The most commonly used bank guarantees which Fibank processes are:

  • Payment guarantee;
  • Advance payment guarantee;
  • Tender letter of guarantee;
  • Performance guarantee;
  • Other letters of guarantee depending on the specific deal and customer needs.

Fibank has established a wide network of correspondent banks and services international bank guarantees in almost all parts of the world.

Fibank has highly qualified specialists in the field of international bank guarantees who are at the customers’ disposal to consult them on the preparation of the text and the conditions of their guarantees.

In its activity of international bank guarantees processing Fibank adheres to the “Uniform Rules for Demand Guarantees”, 2010 revision, publication No 758 of the ICC, Paris in conformity with the effective Bulgarian legislation, the Bank’s interior regulations and the common international banking practice.

The collection is a service under which the Bank processes financial and/or commercial documents in accordance with the instructions given by the collection ordering party with the purpose of receiving a payment or acceptance of the documents by the payer.

The documentary collection is a widely used payment method with higher security compared to the direct payment order since the movement, the safekeeping and the delivery of the documents is made through the mediation of banks.

The most common types of collections are:

  • Clean collection – collection of financial documents (bills of exchange, drafts, promissory notes);
  • Documentary collection – collection of commercial documents (invoices, transport  and other shipment and financial documents);

In export collections the commitment of Fibank is to send the export documents to the respective bank, providing a service to the importer, accompanied by instructions about their passing to the importer.

In import collections the commitment of Fibank is to receive, keep and hand over the documents to the importer in accordance with the instructions received form the exporter’s bank.

In collection services the Bank undertakes less obligations and therefore applies lower fees and commissions compared to the ones applied to Letters of credit transactions.

Fibank services all types and forms of collections for the import and export transactions of its customers.

In its activity of collections processing Fibank adheres to the “Uniform Rules for Collections”, brochure No 522 of the ICC, Paris in conformity with the effective Bulgarian legislation, the Bank’s interior regulations and the common international banking practice.

Business

For more information:

Please contact our specialists in Corporate Banking Department:

(+359 2) 9 100 140
(+359 2) 9 100 113

Address for correspondence:

First Investment Bank AD

81G, Bulgaria Blvd.
1404 Sofia

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