For importers, there are instances when goods arrive at the port of destination, and the buyer is unable to take possession as the transport documents are made to the order of RHB Bank or consigned to RHB Bank. In these instances, the buyer approaches the bank to endorse the transport documents to the buyer's order to enable the buyer to take possession of the goods. As the endorsement is done prior to payment of the consignment, it is termed as Advance Endorsement.
Documentary Collection is a payment mechanism by which an exporter uses the services of banks to obtain payment from an importer. It provides a compromise between open account terms and payment in advance. Banks do not guarantee payment but only provide service to collect funds as instructed.
Import Documentary Collection (also known as Inward Documentary Bill for Collection (IBC)) allows you to obtain the necessary commercial and financial documents before you make payment to your supplier. Documents are sent to the importer through the exporter's bank (remitting bank) to the importer's bank (collecting bank).
Upon the collecting bank's receipt of documents, the collecting bank will deliver the documents to the importer against payment for sight bills or against acceptance for usance bills. The importer will be able to take possession of the goods with the custody of the documents acquired through payment or acceptance. RHB Bank is able to take on the roles of the remitting and collecting banks in this instance.
Export Documentary Collection (also known as Outward Documentary Bill for Collection (OBC)) allows you to send your shipping documents through a remitting bank (exporter's bank) for onward transmission to the collecting bank (importer's bank). Your shipping documents will be delivered to the buyer upon payment of the sight bill or acceptance of the usance bill. Hence you will retain control of the goods until your buyer pays or accepts to pay at maturity of the bill. You may also require the collecting bank to avalise the drafts where the collecting bank will guarantee payment at maturity. RHB Bank is able to take on the roles of the remitting and collecting banks in this instance.
RHB offers Enhanced Export Collection Services in addition to the existing efficient service to expedite receipt of export proceeds.
For importers and exporters, under usance Documentary Collection, the buyer's bank is only responsible to deliver the inward documents to the buyer against the buyer's acceptance of the drafts. The buyer's bank does not guarantee payment of the above bill at maturity and the onus is on the buyer to make good on the payment. Under RHB Bank's IBC Avalisation, RHB Bank will guarantee payment upon maturity giving assurance to the seller.
If your goods imported under Letters of Credit have arrived at the port before shipping documents have been processed through the banking system, RHB Bank can issue a Shipping Guarantee which allows you to take possession of the goods from the shipping company or agent in the absence of the original Bill of Lading.
Letter of Credit (LC) is one of the payment methods for settlement of domestic and international trade transactions.
It is a written undertaking given by a bank (Issuing Bank) to the seller (beneficiary), at the request and on the instructions of the buyer (applicant), to pay at sight or at a determinable future date up to a stated sum of money, within a prescribed time limit and against compliant presentation of stipulated documents.
Our Letter of Credit allows you to make payment only upon presentation of compliant documents by your supplier, documents you have agreed with your supplier at the beginning. The same documents spell out the terms and conditions you have agreed with your supplier. Thus, you are assured that your interests are taken care of in the process of purchasing goods. The Letter of Credit also allows you to take control of your payment terms and establish your credit worthiness as a buyer.
Our Letter of Credit provides you with assurance that payment will be received if the terms and conditions of the Letter of Credit are met. Upon receipt of the Letter of Credit, the exporter will ship the goods in accordance with the terms and conditions of the Letter of Credit and present documents to reflect compliance. Documents presented will then be checked for compliance and payment is guaranteed by the buyer's bank. Thus the exporter can prepare for shipment or even source materials required to manufacture the goods for shipment upon receipt of the Letter of Credit.
Standby Letter of Credit represents a simple form of security that does not require proof of non-performance or default from either parties.
Standby Letter of Credit allows you to cover financial obligations to your beneficiary in the event of payment default after the beneficiary has secured due performance. Standby Letter of Credit represents a simple form of security to your beneficiary and does not require proof of non-performance other than a simple claim.
Standby Letter of Credit is similar to a bank guarantee where the bank will guarantee payment in the event default, eliminating buyer's risk of non-payment.
Standby Letter of Credit provides the beneficiary with assurance that payment will be received in the event of applicant default. Standby Letter of Credit represents a simple form of security to you and does not require proof of default other than a simple claim. It is similar to a bank guarantee where the bank will guarantee payment in the event of default, eliminating the buyer's risk of non-payment.
A Transferable Letter of Credit (TLC) is a Letter of Credit (LC) that specifically states it is transferable and may be made available in whole or in part to another beneficiary (second beneficiary) at the request of the beneficiary (first beneficiary).
TLC allows your supplier (first beneficiary) to make available in part or in whole the TLC to one or more second beneficiaries. This enables your supplier to transfer part or all of his rights and obligations to the second beneficiary (actual supplier). The first beneficiary does not need to issue a Letter of Credit to the second beneficiary and only need to transfer the TLC, varying certain terms and conditions. Goods are shipped directly from the second beneficiary to the buyer in this instance.
TLC allows you to make available in part or in whole the TLC to one or more second beneficiaries. Thus you will be able to free up your funds and credit facilities in fulfilling your duties as a middleman. This gives you added financial manoeuvrability. You will also be able to control the trade transaction better as amount, latest shipment date, expiry date and several other terms are changed. The second beneficiary also receives added comfort in receiving a TLC issued by a bank.
For importers, OTCLC is a Letter of Credit facility offered to customers who require Letter of Credit issuance on ad hoc basis, secured against fixed deposit or cash margin as collateral.
BBLC allows your supplier to secure delivery from the actual supplier, while allowing the exporter and middleman to purchase goods required in the Master LC.
Back to Back Letter of Credit (BBLC) allows your supplier to secure the delivery of goods from the actual supplier. The BBLC (sometimes referred to as the Baby or Slave LC) is issued on the strength of the Master Letter of Credit (Master LC) issued by you and its terms differ in varying degrees from the Master LC. This allows greater flexibility and variation in terms and conditions compared to the Transferable Letter of Credit.
BBLC allows you to purchase goods required in the Master LC from your ultimate supplier. The Slave LC will contain the salient points of the trade such as goods description and shipment details. However, the identity of the ultimate buyer and the actual purchase price will not be made known to the ultimate supplier.
RHB Bank has launched the Chinese Renminbi (RMB) Trade Products and Payment Services to cater for any Malaysian enterprises or companies who have trade related (import or export of goods) and services with Eligible Enterprises in Mainland China.
Together with our Chinese partner banks, RHB Bank is now able to serve the local community in ensuring that they are able to access highly reliable and professional cross border settlement services to cater for any requirements of Malaysian individual and corporate customers who have dealings with their counterparts in Mainland China in RMB.
The People's Bank of China, together with other relevant authorities in China have officially announced that the extension of the scope of CNY cross-border trade settlement from twenty (20) provinces/autonomous region/centrally administrative cities in Mainland China to ALL PROVINCES in Mainland China which covers 22 provinces, 5 autonomous region and 4 centrally administrative cities as follows:-
Note : Geographical coverage has extended to entire nation
With this announcement, any enterprise in the relevant provinces and cities in China can now settle their merchandise imports and service trade transaction in RMB, while an expanded list of Eligible Enterprises in China will be able to accept their merchandise exports in RMB.
The RMB Trade Products and Payment Services offered by RHB Bank are as follows:
For Remittance of RMB, RHB Bank offers competitive foreign exchange rates, both in CNY and CNH. For further information on foreign exchange rates, please click here.
For exporters and importers (corporate/wholesale customers only), the Bank acts only as a Buyer's Bank, Seller's Bank or Submitting Bank in facilitating the submission of data as instructed herein and have no obligation to examine the documents or data beyond the exercise of reasonable care. The data may be provided through hard copy documents or other electronic means for the purpose of submission through SWIFT Trade Services Utility (TSU) application in respect of an underlying trade transaction.
The Bank does not assume any liability or responsibility for:
For Importers (Corporate/Wholesale Customers Only), the BPO is an irrevocable undertaking given by one bank to another bank that payment will be made on a specified date, after a specified event has taken place. This ‘specified event’ is evidenced by feeding the relevant data elements taken from a range of associated open account documentation such as purchase orders, commercial invoices, bills of lading, etc. into a shared Transaction Matching Application (TMA) which then generates a ‘match’ report to show that the description of goods shipped matches precisely the description of goods ordered.
The BPO places a legal obligation on the issuing bank to pay the recipient bank subject to the successful matching of compliant data. In short, the BPO delivers business benefits and security equivalent to those previously obtained through a commercial letter of credit, whilst at the same time eliminating the drawbacks of manual processing typically associated with traditional trade finance.
The governing rule for BPO is International Chamber of Commerce (ICC) Uniform Rules Bank Payment Obligations (URBPO) ICC Publication no 750.
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