In foreign trade you are constantly confronted with challenges. Contractual and punctual delivery, payment security, and counterparty credit risk on top of political and economic uncertainty. With Citizen Mutual ’s products and services, we help you to hedge the risks associated with your global payments exposure.
Our Trade Finance division focuses on providing clients with the best solution to their unique needs. This involves providing issuance, collection and endorsement of, but not limited to, the following:
01.Bank Guarantee (BG)
A Bank Guarantee proves to your international trading partners that you are dependable. Our offer includes direct or indirect guarantees, payment guarantees, bank guarantees and delivery and performance guarantees, depending on what you want to secure. Providing your customers and contractors with security gives you a competitive advantage. For each transaction we will tailor-make a guarantee with you. Alternatively, we will make use of the standardized formulations of the ICC.
02.Letter of Credit (LC)
As a bank we are a specialist in niche and emerging markets. We provide customized solutions to multi-jurisdictional entities, individuals, and families to protect and enhance wealth. We enable them to execute business transactions across the globe in a secure, efficient and transparent manner. As a trusted partner for modern offshore banking, our solutions are based on the latest and secure technological platforms. We support your global success and ensure your international transactions reach their destination at all times.
03. Standby Letter of Credit (SBLC)
A Standby Letter of credit is a special type of LC that works as a standby guarantee to the seller. If the buyer fails to meet his obligation, the bank will cover the payment; that’s why It’s called “standby”. If the seller requires payment advance of the goods or services, the standby letter of credit can act as a payment guarantee. The advance payment standby letter of credit protects against one party’s failure to pay the other party’s advance payment.It is not drawn down unless some unwanted incident like a buyer’s default or bankruptcy.
Citizen Mutual is proud to offer its trade finance correspondent network and relationship to its clients. We are able to advise instruments directly or through prime corresponding banks worldwide.
With a flexible team, our Trade Finance Desk creates innovative trade finance solutions for complex needs. Our flexibility and specialist team lets us offer very competitive rates as compared to the market.
The cost of an LC/BG depends on various factors
- Size of the Instrument (value and currency)
- Duration for which the Instrument must be open
- The format in which the instrument must be communicated (SWIFT message type, KTT Telex or paper based)
- If the instrument needs to be advised or confirmed from one of our partner institutions or a Prime Money Center Bank
- Verbiage of Instrument
At Citizen Mutual we require that fees for the instruments are paid before we issue the instrument. However, in order to provide protection to clients we always offer a free draft of the LC/BG to the client before requiring any fees. This way the client may present the draft to the other party’s bank before we go ahead with official bank-to-bank communication. This also ensures that the instrument is suitable for the exact requirements of our clients. Once fees are received the instrument (LC/BG) is issued within 48 hours. Certain factors such as time zones come into play when determining exact turn around time.
Issue of Trade Finance Instruments is subject to various internationally agreed rules, including:
- The rules of documentary credits
- Publication 600 of the International Chamber of Commerce
- The Uniform Collection Rules (UCR)
- Publication 552 of the International Chamber of Commerce
- The International Standby Practices ISP 98 rules
Important Note: Currently, due to unprecedented high demand, our Trade Finance Desk is only accepting new trade finance business from our Commercial Account Holders who have first completed onboarding due diligence with a Multi-Currency Account (MCA) a minimum funded cash balance of 50,000 USD/EUR/GBP. We unfortunately cannot provide nor discuss our Trade Finance Services with persons who are not existing clients of our bank adhering to the minimum stated.
