Nostro Letters of Credit

Nostro letter of credit is a written obligation of the Bank to effect payment to the L/C beneficiary (seller of goods/services), usually through advising, confirming or reimbursing bank in the country of the beneficiary, provided that the beneficiary has presented compliant documents to the Bank within the specified time frame. The most important part of the service is not the price, but professional support extended by the Bank.

There are different types of documentary letters of credit, including: covered, uncovered, transferable, non-transferable, revolving, sight, acceptance, time, and standby.

It is very important for a foreign trade company to consult the Bank, prior to concluding a foreign trade contract, on defining the financial clause adequately:

• what type of letter of credit the buyer should open,
• when the letter of credit must be opened,
• what the letter of credit precise terms are.