What is a domestic letter of credit?

A domestic letter of credit is a payment commitment opened by IB (the issuing bank) based on the application of the applicant where a payment will be made by presenting documents under the L/C. A domestic letter of credit is an irrevocable and nontransferable documentary L/C, with RMB as the settlement currency.

Target users

A domestic letter of credit is applicable to enterprises with an independent corporate capacity that engage in domestic trade and perform settlements in RMB.

Advantages of domestic L/C to buyers and sellers

◆ Advantages to buyers

Flexible settlement methods and diversified financing varieties

Low criterion for credit extension and simple examination procedure

Capital occupation reduced and financial costs saved

Beautifying financial statements and improving market image

◆ Advantages to sellers

Reduce the risks to sellers relying on bank credit

Utilizing bank financing to accelerate the recouping of corporate sales income

Accelerate fund circulation and save financial cost

Improve mutual trust when trading and increase market share

Advantages of Industrial Bank in domestic letter of credit

◆ Fast service channels

◆ Excellent credit standing guarantee

◆ Various financing products

◆ Inexpensive financing costs

◆ Diversified product portfolio

Products under the Industrial Bank domestic letter of credit

◆ Domestic L/C settlement products

Settlement products include: establishment of L/C, notifications, and consignment collection, etc. 

◆ Financing products under domestic L/C

They can be divided into buyer financing products and seller financing products according to the different purchasing and selling organizations:

1. Buyer financing products: Credit extensions and activation of L/C, buyer financing, and buyer agency payments, etc.

2. Seller financing products: package loans, seller financing, negotiation, discounted accounts receivable, forfeiting, and seller agency payments, etc.

Industrial Bank domestic letter of credit handling procedures

◆ Handling procedures for buyer related businesses

◆ Handling procedures for seller related businesses