Non-Funded Facilities/Trade Finance
1. Letter of Credits:
Afghan United Bank’s trade finance is tailored to meet the international business needs of your company.
With Afghan United Bank’s Letter of Credit, you can ensure your suppliers of the timely payments for your imports. Our Letter of Credits is backed by confirmation from reputed International banks and is thus accepted by exporters worldwide. LC is one of the most widely used modes of setting international trade debts. It is also convenient and common method of securing short term finance from the banks to bridge the temporary liquidity crisis for buyers/suppliers.
Afghan United bank offers both inland and foreign LCs based on the tenor of the bill namely:
- Sight LC
- Usance LC
2.1. Letter of Credit:
When buying goods from overseas suppliers, you will wish to receive the goods as ordered in the right quantity, right time and at the right place. You will also wish to make payments only after receipt of the required documents including the title of goods.
We can solve your needs by issuing a documentary credit on your behalf. A documentary credit is our Bank’s guarantee of payment for a shipment of goods against specific documents as stipulated on it.
By using a Letter of Credit, we will only make payment after receipt of titles and other documents that should fully comply with the terms of the credit. You can enjoy a safer and cheaper alternative to making advance payment or deposits.
2.2. Back-To-Back Letter of Credit:
If you are an intermediary and your supplier wants to sell on documentary credit term only, you may apply for the issuance of a Back-to-Back Letter of Credit from us against the export Letter of Credit.
A Back-to-Back Letter of Credit is issued against the export credit (the master credit), but the terms and conditions may not be the same as the export credit. You must submit your own draft and invoice, together with the other shipping documents presented by your supplier to secure payment under the export credit. After processing, you will have the export proceeds to pay your supplier and the balance credited to your account.
2.3. Deferred Letter of Credit:
A documentary credit which allows the nomination of a bank, or the issuing bank to effect payment against stipulated documents at a maturity date as specified or determinable from the terms of the credit. With this you are able to receive the goods now and pay later.
2.4. Letter of Guarantees:
A bank guarantee is a written promise issued by a bank at the request of its customer, undertaking to make payment to the beneficiary within the limits of a stated sum of money in the event of default by principal.
The most purposes for the uses of Bank Guarantees are:
2.4.1. Bid Security (Bid Bond)
A Bid Security, also called a Tender bond or a tender guarantee, is an undertaking by a Guarantee issuer (usually a bank) to pay a sum of money to your prospective buyer (the beneficiary) if you win a Bid for a project but then fail to enter into the project contract.
2.4.2. Performance Guarantee (Performance Bond)
The performance Bank Guarantee is an irrevocable undertaking of a bank to pay a certain amount to the beneficiary of the guarantee within the specified limits of the guarantee if the bank’s customer who has requested the bank to issue such guarantee (the principal) has failed to fulfill his obligations towards the beneficiary.
2.4.3. Advance Payment Guarantee
A guarantee issued by a bank, on behalf of a seller to a buyer, in relation to any advance payment that is made by the buyer to the seller to allow the contract to commence. If the contract is not completed the buyer can claim reimbursement of the advance payment under the guarantee.
AUB’s Bank Guarantees can be made available to you against minimal requirements and in the shortest possible time. Afghan United Bank issues Letter of Guarantees on behalf of our valuable customers to various Government, Semi Government Departments and Private Sectors. We issue bid bonds, advance payment guarantees, performance guarantees and standby LCs.
2.5. Import bills for collection:
By informing your supplier to send their shipping documents to Afghan United Bank, you will enjoy prompt advice upon our receipt of documents and efficient payment according to your instructions.
2.6. Import Financing:
Afghan United Bank will be able to provide financing solutions to pay for the supplier’s documents under letter of credit or import collections.
If you are in the export business, we can help you with Export L/C, advising L/C, Safekeeping L/C, Confirmation L/C, Checking and Negotiation. For financing solutions, tap on to Pre-shipment Export Finance, Export Bills for Collections, Invoice Financing etc.
3.1. Export letter of credit advising:
Benefit from prompt advising of export letter of credit from a wide international network through Afghan United Bank.
3.2. Export letter of credit safekeeping:
Rather than be inconvenienced by coming to the bank to the bank for collecting your export letter of credit, Afghan United Bank will keep your Submitted original documents in as a safe custody and send you a working copy to facilitate the preparation of documents.
3.3. Export letter of credit confirmation:
Exporters may deal not only with unknown foreign buyers, but also with their banks which are less well known institutions and whose letter of credit (LC) may not be sufficient comfort. By requesting Afghan United Bank to confirm your export LCs, you obtain our guarantee of payment for documents presented in compliance with the credit.
3.4. Pre-shipment export financing:
We provide pre-shipment finance against irrevocable letters of credit from or purchase orders in a number of currencies to allow you to trade with confidence. If you need to fulfill a sales contract but need funds to purchase raw materials or process goods for export, Afghan United Bank offers you pre-shipment export financing in a variety of currencies.
3.5. Letter of credit checking and negotiation:
Afghan United Bank’s thorough checking standards will reduce the chances that your documents will be rejected. Strict service standards are applied to ensure that your documents are negotiated and dispatched quickly.
3.6. Export bills for collection:
Simplified dispatch tracking of payment and reconciliation of your export collections when you choose Afghan United Bank’s documents against acceptance, documents against payment or clean collections. AUB is also offering discounting of export collections under mutual agreement.
4. Retention Bond
A type of performance bond that protects the beneficiary after a job or project is finished. It guarantees that the contractor will carry out all necessary work to correct structural and/or other defects discovered immediately after completion of the contract, even if full payment has been made to the contractor.