Trade Finance Letter of Credit

Documentary credit (import):

Is an irrevocable commitment submitted by the Saudi National Bank at the request of one of its customers, in which it pledges to pay a sum of money within an agreed period of time (by sight or deferred) in exchange for the customer receiving a service or a commodity. A documentary credit is used for the purpose of facilitating international and domestic trade. It helps customers to facilitate payments to local and foreign suppliers and provide a guarantee of fulfilling clearly stated terms of credit.

Through documentary credits (import) the applicant can specify the following:

Description of the goods or service required
Determining payment terms and term
Define shipping terms
Determine the required documents

The Saudi National Bank offers Letters of Credit in different types such as:

Revolving Letter of Credit
Transferable Letter of Credit
Stand by Letter of Credit
UPAS LC

The Saudi National Bank also provide Shariah Compliant financing solutions to facilitate the LC payment through:

LC Murabaha
LC Refinance by Tawarruq (Tayseer)

Documentary Credit (Export):

The role of the Saudi National Bank is to advise the beneficiary / customer with the letter of credit, while verifies the validity of the letter of credit and makes a recommendation to the beneficiary.

The bank also undertakes to check and circulation of export documents/documents, and ensures that the documents are in conformity with the accreditation request, in addition to the credit enhancement service.

The beneficiary is required to deliver the documents to one of the branches and attach a form Covering Letter (Export LC Documents).

The Saudi National Bank also provide an early payment solution to discount the LC (with and without recourse on supplier).

Letter of Credit Program for Saudi Industrial

Development Fund Clients

Overview

Based on Saudi Vision 2030 and in coordination with SIDF's direction for developing the manufacturing industry in Saudi Arabia, the Saudi National Bank and the SIDF provide essential support to facilitate lending and financing industrial projects in the Kingdom through the Letters of Credits Program provided to the SIDF clients, which aims to provide the necessary support to import industrial needs (locally and internationally) such as machines, equipment and raw materials to provide the necessary liquidity for project costs, where the SIDF pays the Letters of Credits on behalf of its clients and facilitates customer payment procedures according to the commitment agreement concluded between SIDF and the client.

Features and Benefits:

Facilitating payments to local and external suppliers and providing a guarantee of fulfilling the terms and conditions to increase governance and reduce risks related to global trade. Also, the implementation of Letters of Credits procedures at the Saudi National Bank is carried out with high efficiency through our extensive and solid relationships with intermediaries from banks and international financial institutions, in addition to the competitive prices offered by the Saudi National Bank, exclusive to SIDF clients.

Application Process:

Customers wishing to join the Letters of Credit Program must sign a commitment agreement with the SIDF and obtain the required approvals.
Fill out the Program's Letters of Credit Issuance/Amendment application form Here.
Fill out the Bank fee deduction approval form Here.
Fill out the authorized signatory form Here.
Provide the Bank with a copy of the commitment agreement concluded with the SIDF to open the Letters of Credit Program account.
Upload the Letters of Credit notification letter and the Letters of Credit Issuance form through the SIDF portal for clients Here.

Once approval is received from SIDF, the Saudi National Bank will notify both the SIDF and the applicant after issuing the Letters of Credit.

For further information about the program:

Contact SNB AlAhli:

General Inquiries & Customer Support: 920024288

Or send an E-mail to: tb-TradeFinance@alahli.com

Contact SIDF:

Toll-free: 8001660004

Email: info@sidf.gov.sa

Letter of Credit