A written irrevocable undertaking issued by the bank to pay to the beneficiary a specific sum of money on demand in the event that its customer (applicant) has not fulfilled his contractual obligations, within the validity of the guarantee.
Letters of Credit
A Letter of Credit is an undertaking issued by a bank (Issuing Bank) for the account of the buyer (the applicant) to pay the beneficiary (the seller), provided that the terms of the Letter of Credit are complied with. It is generally used to facilitate importation / Exportation of goods and services as well as local trade.
Financing of customer’s LPO at an agreed fee and commission. The facility will be applicable to customers who normally trade with reputable companies with good credit rating.
Giving value to the seller for services/goods sold on credit terms (e.g. 60 days, 90 days…) before maturity date subject to confirmation of the acceptance by drawee through their bankers.
Facility offered by the Bank to the customer to purchase inputs for the production process of goods which are for onward sale/export.
A loan facility given by the bank to an importer (customer) to settle bills of exchange that have matured and the importer (customer) has not mobilized adequate resources to settle the same.
Foreign Demand Drafts
It is a service for facilitating payments for clients who require guarantee for making payments abroad.
This is a term used to describe financing technique whereby the commodity (goods) imported are placed at the custody of collateral manager.
Structured Trade Finance
This is a term used to describe various financing techniques or even restructuring techniques i.e. any structure that isolates asset being financed from the originator and used to support the financing being raised as collateral/ source of disbursement.
This is an undertaking given by the Bank to honour, on a customer’s behalf, payments of Bills of Exchange.
The handling of documents in accordance with instructions received (collection instruction) from the remitting bank on behalf of the drawer in order to obtain payment or acceptance from the drawee.
This aims at facilitating clearing of foreign currency cheques drawn on foreign banks. It assists Equity Bank customers who trade with foreign cheques.