Letters of Credit
Gazbank offers its clients to make payments using a letter of credit method.
Letters of credit in rubles may be used by individuals at making non-cash payments on the territory of the Russian Federation not related to carrying out of entrepreneurial activity, under agreements with another individual including but not limited to an individual entrepreneur or a legal entity.
The letter of credit payment method is very convenient for real estate transactions as it guarantees reliability of payment stipulating that cash may be paid to the seller only upon presentation of documents certifying the title to the real estate. In the event of refusal from a transaction the buyer closes the account and gets the money back according to the earlier made agreement.
- The purpose of a letter of credit opening may be payment for goods, works, services, real estate, other subjects according to the legislation.
- A letter of credit is opened for settlements under an agreement between the payer and the beneficiary and constitutes a written liability of the bank issued at the request of the payer (buyer) to the beneficiary (seller), the essence of which is payment on conditions and against the documents stipulated by the agreement between the payer and the beneficiary.
- The payer’s cash in the letter of credit amount is deposited in a special account with the bank at letter of credit opening and paid to the beneficiary upon provision of the bank with the documents certifying discharge of obligations by the parties to the agreement and corresponding to the letter of credit terms.
- The cash is returned from the special account to the payer’s account if no transaction has taken place (no documents have been provided to the bank prior to the letter of credit expiration).
- The main advantage of the letter of credit payment method is participation of a bank as an independent guarantor of making payment when the parties to a transaction fulfill all conditions stipulated in the letter of credit.
- The letters of credit of Gazbank are an optimal settlement instrument between the parties to a transaction in conditions of lively trade on the real estate market.
- The bank employees render consulting services at all stages of the deal including preliminary discussion of the agreement payment terms.