Documentary credit (Letter of Credit)

An irrevocable commitment

Documentary credit (Letter of Credit)

An irrevocable commitment


An irrevocable payment commitment.


As an importer you will have more control and greater certainty that the products will be delivered correctly and on time.


The best means of payment for trade transactions within Europe and in the rest of the world.

Your trade receivables insured

Doing business with the Far East? Or concluding an agreement with a new trading partner in Europe? Then the documentary credit is the ideal solution. Even if you don't know the other party, you can do business safely.

  • As a beneficiary you can count on the bank's commitment in respect of your payment with covering documents; you are therefore not dependent on the buyer's willingness to pay.
  • This gives importers more peace of mind, as suppliers must submit certain shipping documents in order for them to be paid. 

How does the documentary credit work?

The documentary credit, Letter of Credit (L/C), is an irrevocable payment commitment issued by the issuing bank. The payment process in five steps:

  1. The purchaser takes out a documentary credit with their bank; this is the issuing bank.
  2. The issuing bank agrees to pay the agreed amount pursuant to the terms and conditions of the documentary credit.
  3. The beneficiary then supplies in accordance with the contract and provides their bank with the requested documents.
  4. The beneficiary's bank checks the shipment documents and makes them available to the issuing bank.
  5. The issuing bank pays the agreed amount to the beneficiary. 

Want to know more?

Please note that the documentary credit is a formal instrument of payment. In other words, the documents presented must comply with the terms and conditions stated in the documentary credit. The issuing bank is, therefore, only required to make payment against receipt of the complying documents.

To find out more about the different aspects and various types of documentary credit, feel free to contact us. We'll be happy to assist you.

Contact your relationship manager

Import forfaiting

Deferred payment for the importer and certainty of payment for the exporter? Consider import forfaiting.
Import forfaiting