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tradeFinance.pngTrade finance, implemented by JSCB "Kapitalbank", contributes to reducing the risks of the Bank’s customers when conducting foreign trade operations, increasing cash flows, development and strengthening solid trust relations with foreign Banks.

Trade finance promotes the development of additional activities, such as: conversion operations in the domestic foreign exchange market, the provision of Credit Lines to the Bank’s customers, as well as increasing balance of the customers' accounts and others.

JSCB "Kapitalbank" provides:

  • Letter of Credit
  • Letters of Credit with a "post-funding"
  • Guarantee transactions
  • Collection of payments

Letter of Credit

Documentary Credit is the Bank's monetary obligation accepted on the basis of an order of a Customer-Buyer to make a payment in favor of the Seller after the latter has submitted the documents stipulated in the terms of Letter of Credit. The use of Documentary Credit of different designs in settlements between the Buyer and the Seller allows to minimize the risks associated with a Party to the Contract.

By opening Letters of Credit and carrying out transactions thereon, JSCB "Kapitalbank" follows the Uniform Customs and Practice for Documentary Credits (International Chamber of Commerce Publication No. 600, edition 2007).

The Bank opens Documentary Credits in Uzbek soums and foreign currency.

Letters of Credit transactions in Uzbek soums (Issuing Bank):

  • opening of a covered irrevocable Letter of Credit
  • confirmation of a covered irrevocable Letter of Credit
  • opening of uncovered Letter of Credit
  • confirmation of uncovered irrevocable Letter of Credit
  • changing the terms of open Letters of Credit (except for increasing the amount of Letter of Credit)
  • increase in the amount of open covered revocable Letter of Credit
  • increase in the amount of open covered irrevocable Letter of Credit
  • revocation of open Letter of Credit prior to the extension of its validity period
  • acceptance and verification of documents received from the Nominated Bank regarding an open Letter of Credit

Letters of Credit transactions in Uzbek soums (Nominated Bank):

  • acceptance and verification of documents on Letter of Credit
  • payment under Letter of Credit
  • changing the terms of Letters of Credit
  • revocation of Letter of Credit prior to the extension of its validity period

Letters of Credit transactions in foreign currency

Letters of Credits opened by the Bank:

  • opening, prolongation, increase in the amount of Letter of Credit
    • covered
    • uncovered
  • prolongation of Letter of Credit within the period for which the commission has been accrued upon opening Letter of Credit
  • changes in the terms of Letter of Credit not related to its validity, amount, terms of payment
  • cancellation of Letter of Credit prior to the extension of its validity period
  • acceptance, verification of documents on Letter of Credit
  • payment under Letter of Credit:
    • under the Contract providing for the payment of goods imported into the customs territory of the Republic of Uzbekistan
    • under other Contracts
Letters of Credit advised through Bank:

  • preliminary advising of Letter of Credit
  • Letter of Credit advising, increasing the amount of Letter of Credit, prolongation of Letter of Credit:
    • with its execution by the Bank
    • without its execution by the Bank
  • prolongation of Letter of Credit within the period for which the commission has been accrued when advising Letter of Credit
  • advising changes in the terms of Letter of Credit that are not related to the validity period, an increase in the amount, payment terms
  • cancellation of Letter of Credit prior to the extension of its validity period:
    • if the Bank does not have funds under the advised Letter of Credit
    • if the Bank attracts funds under the advised Letter of Credit
  • acceptance, verification of documents under Letter of Credit:
    • with its execution by the Bank
    • without its execution by the Bank
  • Letter of Credit confirmation:
    • covered or issued by a first-class Bank
    • uncovered

The Bank’s Guarantee Transactions

The Bank guarantee is the obligation of the Guarantor Bank issued on behalf of the customer (and at his expense) to pay the beneficiary of the Bank guarantee a sum of money in accordance with the Agreement between the customer and the recipient. Payment is made upon submission of the written request of the beneficiary, as well as additional documents specified in the Bank guarantee.

Unlike a Documentary Credit and Documentary Collection, a Bank guarantee is not a form of settlement between the Parties under the Contract, but an instrument designed to ensure fulfillment of certain obligations of the Parties.

Guarantee transactions, Standby Letters of Credit include the following services:

  • issue, increase in amount, prolongation of the guarantee period (counter-guarantee) of Standby Letter of Credit:
    • - covered
    • - uncovered
  • prolongation of the guarantee period (counter-guarantee) of Standby Letter of Credit within the period for which the commission has been accrued
  • amendment to the guarantee terms (counter-guarantee) of Standby Letter of Credit, not related to the increase in the amount and the extension of the validity period; early cancellation of the guarantee
  • payment under the guarantee (counter-guarantee), Standby Letter of Credit issued by the Bank:
    • - covered
    • - uncovered
  • advising, increasing the amount, prolongation of the validity period of the advised guarantee
  • advising changes in the guarantee terms, not related to the increase in the amount and the extension of the validity period
  • verification of the payment request sent to the Guarantor Bank under the Bank-advised guarantee

Collection transactions

Documentary Collection is the acquisition of receivables by the Seller through the Bank against the transfer of the Seller’s documents to the Buyer by the Bank.

Documentary Collection provides greater security guarantees compared to direct Bank transfer: it does not allow the Buyer, without paying for goods, to obtain possession of the administrative and accompanying documents and, as a result, the goods themselves.

When working with Collection, the Bank is guided by the Uniform Rules for Collections (International Chamber of Commerce Publication No. 522, edition 1995).

Collection transactions include:

  • acceptance and sending documents for collection
  • change instructions for collection order
  • return of unpaid documents to the Grantor
  • issue of documents free of payment
  • notification of acceptance documents for collection
  • issue of documents against payment / acceptance

Import finance using a Letter of Credit with post-financing

  • If it is not possible to obtain a commodity credit from the Exporter and, accordingly, a deferred payment under the Contract, JSCB "Kapitalbank" offers import finance
  • Amount of financing: - up to 100% of the shipped goods amount
  • Term of financing (deferred payment) - up to 12 months from the date of payment by a foreign Bank to the Exporter
  • The objects to be financed are equipment, raw materials, materials, etc.
  • 100% payment to the Exporter by means of a foreign Bank upon shipment of goods and provision of a package of documents to the Bank
  • Price depends on term, selected Credit Line and Bank charges
  • Calculation scheme for Letter of Credit with the condition of post-financing

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    * Supporting, executing, funding

    1. Contract to deliver goods (services).
    2. Letter of Credit Agreement with the condition of post-financing.
    3. Letter of Credit in favor of the Exporter.
    4. Delivery of goods (services).
    5. Documents under the Letter of Credit.
    6. Payment under the Letter of Credit, deferment of repayment of obligations under the Letter of Credit (financing).
    7. Deferment of repayment obligations under the Letter of Credit.
    8. Repayment of obligations under the Letter of Credit.
    9. Repayment of financial obligations.

    Basic requirements for the Borrower:

    • The place of business dealing and its registration in the regions, where JSCB "Kapitalbank" operates;
    • Availability of collateral;
    • Absence of negative credit history and defaults.

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