Loro Letters of Credit

CKB offers its clients the service of processing all types of Loro letters of credit, i.e. letters of credit that ensure the payment collection for exported goods.

Fundamental principles governing documentary letters of credit are:

• Principle of dealing with documents only and not with goods or performance
• Principle of independence of L/C obligations from underlying contract
• Principle of autonomy of legal relationships
• Principle of examining documents

There are two key elements of documentary letter of credit:

• issuing bank (in the case of a Nostro L/C, CKB) opens/issues an irrevocable L/C in favour of beneficiary (seller of goods/services) and assumes an irrevocable undertaking to pay the beneficiary;
• the beneficiary will collect the funds provided that the Bank is presented the documents specified in the L/C that are in strict compliance with all terms and conditions stipulated in the L/C within the foreseen time.

Letters of credit may be used by all legal entities which are the Bank’s clients.