04.11.2015, 15:34
Sberbank Launches New Product
OREANDA-NEWS. A new product has been added to Sberbank's line of trade finance and documentary business services - Russian unsecured letters of credit with advance payment. This product is intended for corporate clients - both buyers and sellers of goods and services, who wish to finance trade contracts and reduce commercial and financial risks.
This offering will benefit Russian companies carrying out commercial activities or providing services in Russia in situations where the buyer or customer needs to defer payment but the supplier or contractor has limited access to financing. At the same time, both parties to the deal need guarantees: the seller requires a guarantee of payment while the buyer requires a guarantee of supply.
Andrei Ivanov, Senior Managing Director, Head of Sberbank CIB's Trade Finance and Correspondence Relations Division, commented: "Domestic letters of credit are one of our most popular products. The volume of operations with Russian letters of credit in 9M 2015 was around RUB 193 bln, a 63% increase compared to the same period last year. Russian unsecured letters of credit with deferred payment are an important addition to our product line. With this product Sberbank serves as the source of financing for a commercial transaction and provides the seller the opportunity to receive payment before the end of the deferral period stipulated by the contract and conditions of the letter of credit (standard deferral period is up to 180 days). As a result the client receives favourably priced financing for the deal and settlement risks are ruled out."
Sberbank is regularly recognised for its trade finance and documentary business activities in Russia and globally. This year Sberbank was named Best Trade Bank in Russia and the CIS by leading international finance publications Global Finance1 and Trade & Forfaiting Review (TFR)2. Sberbank leads the domestic letters of credit market according to the rating agency Expert RA3 (February 2015).
A letter of credit is a document from a bank guaranteeing that a seller will receive a certain sum as long as the latter provides documents that correspond with the terms of the letter of credit.
Unsecured letters of credit do not require the client to possess funds: the bank deposits money to pay for the goods according to a previously established risk limit.
Early payment of a letter of credit is payment made by the bank for the receiver of funds under the letter of credit (which was opened with a deferred payment option for the buyer) after the letter of credit documents have been checked and accepted, but before the deferral period ends.
This offering will benefit Russian companies carrying out commercial activities or providing services in Russia in situations where the buyer or customer needs to defer payment but the supplier or contractor has limited access to financing. At the same time, both parties to the deal need guarantees: the seller requires a guarantee of payment while the buyer requires a guarantee of supply.
Andrei Ivanov, Senior Managing Director, Head of Sberbank CIB's Trade Finance and Correspondence Relations Division, commented: "Domestic letters of credit are one of our most popular products. The volume of operations with Russian letters of credit in 9M 2015 was around RUB 193 bln, a 63% increase compared to the same period last year. Russian unsecured letters of credit with deferred payment are an important addition to our product line. With this product Sberbank serves as the source of financing for a commercial transaction and provides the seller the opportunity to receive payment before the end of the deferral period stipulated by the contract and conditions of the letter of credit (standard deferral period is up to 180 days). As a result the client receives favourably priced financing for the deal and settlement risks are ruled out."
Sberbank is regularly recognised for its trade finance and documentary business activities in Russia and globally. This year Sberbank was named Best Trade Bank in Russia and the CIS by leading international finance publications Global Finance1 and Trade & Forfaiting Review (TFR)2. Sberbank leads the domestic letters of credit market according to the rating agency Expert RA3 (February 2015).
A letter of credit is a document from a bank guaranteeing that a seller will receive a certain sum as long as the latter provides documents that correspond with the terms of the letter of credit.
Unsecured letters of credit do not require the client to possess funds: the bank deposits money to pay for the goods according to a previously established risk limit.
Early payment of a letter of credit is payment made by the bank for the receiver of funds under the letter of credit (which was opened with a deferred payment option for the buyer) after the letter of credit documents have been checked and accepted, but before the deferral period ends.
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