Trade Finance

Withinn the framework of the EBRD and IFC program on intensifying trade finance funding, Khan Bank has contacted over 600 banks worldwide and began to implement the following trade finance products and services:

Documentary credit – Payment duty or payment guarantee issued from the Importer’s Bank to the Exporter. The Bank processes the payment upon the receipt of shipment documentation of the exporter which complies with the terms of the documentary credit.

Advantages of the product

•    The products are shipped without advance payment.
•    Importer can specify the required documents for payment in the terms of documentary credit.
•    Importer can negotiate with the vendor on extending the terms of the payment upon the maturity of the payment   of documentary credit.
•    Exporter receives payment guarantee from the bank before shipping the products.
•    For the importer the documentary credit is more secure and risk free as compared with purchases with down-payments.
•    Using documentary credit for product import is less expensive than taking a loan from the bank and making down payments.
•    Documentary credit is regulated by the international standard banking procedure “General procedure for documentary credit” UCP 600.
•    Khan Bank classifies its letter of credits whether it has source of fund or not and offers guaranteed and non-guaranteed credit services with regard to the classification.
    

Collection – A type of collection service where the exporter sends the shipment documents to the importer’s Bank and collects the payment. This collection service is specifically useful for you if your trade partner has a good and trustworthy collaboration history with your organization. Trade finance collection is easier and cheaper in comparison to the letter of credit service. If you are the seller the buyer delivers the documents on behalf of you to make the claim.
If you’re the buyer the shipment documents are delivered to you and the payment is made in a timely manner.

Advantages of the product

•    No advance payment or payment guarantee is required for the shipment to the importer. The importer will make the payment against the documents that prove the shipment is made by the exporter.
•    In the event of making payment through documentary collection using the bank network, usually the importer and supplier reach an agreement on extending the payment term. 
•    The importer can check the documents at the collector bank before granting authorization for the settlement or making the payment in the specified period.
•    Compared with the other types of Trade Finance products the fees and commissions on documentary credit from the Bank are less.
•    Our documentary credit operation is regulated by international banking standard “General procedure of collection - URC 522”.

Guarantee from the Bank – guarantee of payment of claimed amount specified in the written invoice to the subscriber in the event the contractor fails to comply with its contractual obligations. Bonds or guarantees issued by prestigious banks provide opportunities for the exporter to participate tenders for setting up large numbers of agreements with local and international corporate companies. Using bonds and guarantees provides opportunities to improve the cash flow of the exporter, because having a down payment guarantee makes the importer more receptive  towards the exporter’s down payment.

Khan Bank provides the following guarantees:
1.    Tender guarantees.
2.    Performance guarantees.
3.    Down payment guarantees.

For detailed information please contact the following e-mail address:  tradeservices@khanbank.com