Documentary operations

Import letters of credit

Documentary letter of credit is an international payment operations instrument, where the Bank undertakes an irrevocable obligation to pay the beneficiary of the letter of credit, following the presentation of documents in accordance with terms and conditions defined in the text of the letter of credit.
Documentary letter of credit provides equal protection of buyer’s and seller’s interests, reduction of risks arising from insufficient knowledge of business partners, but also mitigation of political, economic and other risks.

Letter of credit operations are performed in accordance with the Uniform Customs and Practice for Documentary Credits drafted by the International Chamber of Commerce in Paris, accepted by almost all the countries in the world (UCP 600 is currently in use).

Documents required for issuing of import letters of credit

Contract with a foreign partner (terms and conditions of payment have to stipulate unconfirmed/confirmed letter of credit, name and SWIFT address of a foreign partner bank; account number/IBAN number, foreign partner’s name, description of goods)

Proforma invoice (should also contain name and SWIFT code of a foreign partner bank, account number/IBAN number, name of a foreign partner, proforma invoice number, description of goods)

Payment order in 6 copies certified and signed by authorized persons (do not enter the amount and the L/C beneficiary in the form)

Minimum two blank bills of exchange (in case of several deliveries or installments, one bill of exchange per each delivery or installment)

OTP banka Srbija a.d. Novi Sad issues all types of documentary letters of credit.

Export letters of credit

In case you wish to contract collection of your export with an export letter of credit, contact us to receive necessary SWIFT instructions for opening of a letter of credit as well as possible suggestions on defining the financial clause of the basic (commercial) contract.

After we inform you on opening of the letter of credit in your favor, we shall provide you with all necessary information and expert advices on preparation of documents required for collection based on the export letter of credit.

Standby letters of credit

Standby letter of credit is a specific type of letter of credit where the issuing bank, upon the ordering party’s instructions, undertakes the obligation toward the beneficiary of the standby letter of credit to disburse to the beneficiary a particular amount under the condition that, within a certain deadline, the beneficiary submits a written statement that the ordering party has not executed its obligation, supported by other documents, if required in case of the given letter of credit.

Standby letter of credit is similar to a bank guarantee, since it is an instrument for protection against risk of debtor’s failure to execute an obligation from the basic transaction. In contrast to documentary letters of credit, standby letter of credit does not have any documents on goods and transport, i.e. documents on disposal of goods. Banking practice recognizes the following types of standby letters of credit: Advance payment standby, bid bond standby, performance standby, direct pay standby, etc.

OTP banka Srbija a.d. Novi Sad opens all types of standby letters of credit.

Import guarantees

We provide issuing of the following guarantees:

  • Direct guarantees (payment guarantees, bid bonds, performance bonds, deposit return guarantees, advance return guarantees, loan repayment guarantees)
  • Indirect guarantees (with counter guarantee) which imply a guarantee by our correspondent bank based on the counter guarantee of our bank
  • Super guarantee where besides our Bank, some other bank also guarantees the obligation of the guarantee amount disbursement, upon the beneficiary’s request

Export guarantees

In case you wish to secure the collection of your export or fulfillment of any other contractual obligation by a guarantee, contact us to receive necessary instructions and, if needed, get assistance in defining the financial clause of the basic (commercial) contract. After we inform you on issuing of the guarantee in your favor, we shall provide you with all necessary information and expert advices on preparation of possible invitation for payment per guarantee and corresponding documents.