OTP Bank is dealing with all types of documentary operations
- bid bonds (tender guarantees)
- performance guarantees
- advance payment guarantees
- payment guarantees
- stand-by letters of credit
- credit repayment guarantees
- documentary collection
The main advantages of letters of credit and bank guarantees are
letters of credit and bank guarantees may be utilized by you as an alternative to credit funds attraction.
- Low cost:
issuance of letters of credit and guarantees is much cheaper than attraction of credit funds;
OTP Bank’s interest rates for issuance of non cash-covered letter of credit or guarantee is 3-5% p.a.
- Risks minimization:
no risk of non-delivery of goods: payment is made against previously agreed list of documents confirming delivery or even after receipt of goods;
goods quality required by you will be confirmed by respective documents indicated by you in the Letter of Credit.
- Mutual benefit:
letters of credit and bank guarantees are the instruments beneficial not only for you but for your counterparty as well;
utilization of documentary credits and bank guarantees helps to achieve compromise between supplier's and buyer's positions.
- Increase of working capital:
you have a possibility to increase volume of your operations without attracting additional credit funds deferral of payment allowed by your supplier.
- Evidence of reliability of your company:
letters of credit and bank guarantees issued or confirmed by well-known banking institutions prove high reputation in many countries, reliability and creditworthiness of your company.
OTP Bank will help its customers with consultations on all stages of the transactions using letters of credit and/or guarantees, from pre-contract negotiations till successful completion of trade transaction.