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Letters of credit in Russian Roubles
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B&N Bank (Joint-Stock Company) offers to individuals, Russian residents and non-residents, a wide choice of documentary letters of credit for settlements on various trade deals, in particular:

  • Purchase or sale of real estate objects (apartments, cottages, houses, land sites) including a possibility of sale if you get a mortgage loan
  • Purchase or sale of goods including vehicles (cards, yachts, airplanes, helicopters), objects of art, bric-à-brac.
  • Purchase or sale of shares/stocks of Russian and foreign companies
  • Purchase or sale of intellectual property, copyright, etc.
  • Payment for services
Attention!
All payments by a L/C are made only in a cashless form.

Depending on Customer’s needs and transactions, B&N Bank (Joint-Stock Company) opens and honors the following L/C types:

  • revocable letter of credit – is a L/C that can be changed or cancelled by an issuing bank without sending a preliminary notice to a receiver of funds. Revocation of a L/C does not create any liabilities of the issuing bank towards the receiver. The L/C is revocable if its text does not explicitly specify otherwise.
  • irrevocable letter of credit – is a L/C that cannot be cancelled without confirmation by a funds receiver. The irrevocable L/C confirmed by a designated bank cannot be changed or cancelled without approval of the designated bank.
  • covered letter of credit – by opening this L/C, an issuing bank transfers the L/C amount to a designated bank for the entire L/C period.
  • guaranteed letter of credit – by opening this L/C, the L/C cover is not transferred to a designated bank and remains with an issuing bank. The payment procedure for the L/C is defined by an agreement between the issuing bank and the designated bank.

Irrevocable letters of credit are more popular because they protect Receiver’s interests as much as possible.


Tariffs for Documentary Letters of Credit for Individuals

Updated on 18.12.2013
Fees specified in this section are exempt from the VAT

Documentary Letters of Credit in the Russian Federation Currency in the Territory of the Russian Federation Subject to the Central Bank Provision 383-P

# Name Rate Min Max Collecting Procedure
L/C with 100% money cover
1 Open, increase of the amount of guaranteed letter of credit 0,10% 1 000 Rub 15 000 Rub Of the L/C amount /increase of L/C amount
2 Open, increase of the amount of covered letter of credit 0,15% 1 500 Rub
3 Receipt and verification of L/C documents (the bank is the designated bank) 0,15% 2 000 Rub Of the amount of each set of documents
4 Receipt and verification of L/C documents (the bank is the issuing bank) 0,1% 1 500 Rub 10 000 Rub Of the amount of each set of documents
4.1 Receipt and verification of L/C documents (the bank is the designated bank)
* for B&N Bank (Joint-Stock Company) branch office in Novosibirsk
0,05% 500 Rub 10 000 Rub Of the amount of each set of documents
5 Change of L/C conditions (except for amount increase) or cancellation 1 500 Rub 1 500 Rub Per each change
6 Payment under the L/C in favor of the Receiver which is the Bank customer Free of charge
7 Payment under the L/C in favor of the Receiver which is the customer of another bank 2 000 Rub 2 000 Rub Per each payment
8 Receipt of documents provided by the receiver and containing deviations from L/C terms (the Bank is the designated bank) 1 500 Rub 1 500 Rub Per each set of documents. A receiver is always charged the fee.
9 Advice a letter of credit (the Bank is the designated bank) 0,15% 1 000 Rub 30 000 Rub Of the L/C amount
10 Advice changes in a letter of credit 1 000 Rub 1 000 Rub Per each change
11 Withdrawal from a L/C receiver’s account of cash (rubles) within the advised L/C amount (against presentation of the L/C copy) at B&N Bank (Joint-Stock Company) 0,15% Of the L/C amount
12 Transfer from a L/C receiver’s account of cash (rubles) within the L/C amount to account with another bank (on presentation of the L/C copy) at B&N Bank (Joint-Stock Company) branch office in Novosibirsk 0,15% Of the L/C amount
Of the L/C amount
1 Open, increase of the amount of a guaranteed letter of credit by agreement 5 000 Rub
2 Confirmation of the guaranteed letter of credit by the Bank (the Bank is the designated bank) by agreement 5 000 Rub

MUTUAL SETTLEMENTS PROCEDURE

  1. The present Tariffs are valid for operations and settlements between individuals in the form of documentary L/C in Russian rubles in the Territory of the Russian Federation.
  2. If one of the parties under the L/C is a legal entity, the L/C is subject to Provision 2-P.
  3. The present Tariffs do not apply to operations made with savings accounts or overdraft accounts.
  4. If payment for operations specified in the Tariffs is made in cash, operations are made only if there is a cash document confirming payment of fees.
  5. If payment is made by money credited to the Customer’s account in cash, operations are made only if there is a document confirming payment of the specified amount in cash to the Bank cash department.
  6. If the Bank makes operations accepted in the bank practice but not specified in the Tariffs and if there is a special agreement between the Bank and the Customer, the Bank charges the Customer the fee specified in a separate agreement between the Bank and the Customer or in the Tariffs.
  7. Payment for operations specified in the Tariffs is collected by the Bank debit without further authorization. The collected payment is not returned in case of prior cancellation of the obligation or revocation of the order by the Customer.
  8. Besides the payment specified in the Tariffs, the Bank has the right to collect from the Customer without further authorization the amount of actual additional expenses on technical realization of operations incurred by the Bank (including additional fees paid by a correspondent bank, postal, telegraph, telephone expenses; delivery service of documents, etc.).
  9. If the receiver/beneficiary does not have any accounts with the Bank, fees referred to the receiver according to the L/C terms, can be withdrawn by the Bank from the payment amount.
  10. If the Bank cannot collect fees from the receiver which are referred to the receiver’s account according to the L/C terms, such fees shall be paid by the payer.
  11. A letter of credit which cover amount is not written off from the Customer’s account in full (p. 11) is opened by the Bank only if an agreement on opening a L/C is signed with the Bank. The agreement can specify another order of settlement or fee collecting according to the tariffs of this section. The Bank does not open covered L/Cs.
  12. The fee specified in p.4 can be collected only if the Customer-receiver contacted the Bank with the Application to check documents (used only if the Bank is only the advising bank).
  13. When documents are sent via mail/ DHL, postage expenses are compensated by the Customer against their payment by the Bank.
  14. The Bank does not collect additional fees for communication services for standard documentary operations. Cost of telecommunication messages sent by the Bank via TELEX, SWIFT when making documentary operations is taken into account in the fee amount of the present section.
  15. Fees of other banks during operations with L/C are collected in addition to the tariffs of the present section. If the L/C envisages a telegraph aviso, in accordance with Tariffs in Section 5 the Customer is charged a fee for L/C telegrams in addition to the Bank fee according to the Bank of Russia tariffs.
  16. A covered letter of credit is opened only if the Bank has enough limits for the designated bank. In case of unstable financial situation of the designated bank, according to the Bank, and if the Bank does not have enough limits for it, the Bank has the right to refuse to the payer to open a covered L/C.
  17. If the Bank is the issuer and the designated bank, the fee for receipt and verification of documents is charged in accordance with p. 4 of the present tariffs.
  18. If the receiver and the payer are the Bank customers, the fee for L/C opening is charged according to the rate specified in p. 1 or 11 and the fee for advising an L/C and changes hereto is not charged as per pp. 9 and 10.
  19. The fees specified in pp. 3 -10 apply to all types of L/Cs – with 100% money coverage or without it.
Transaction Examples
Document Forms
Normative Documents
Advantages of Settlements by a Letter of Credit

FLEXIBILITY

The letter of credit allows the payer and the recipient to independently determine the conditions of settlement by a letter of credit (the list of documents confirming implementation of obligations by the seller (recipient of funds by a letter of credit). Within the L/C period of validity its conditions can be quickly changed even without amendments to the purchase and sale contract as agreed by the parties.

SECURITY

A letter of credit guarantees complete control of cash flow from the issuing bank and the designated bank, and also proper verification of presented documents by independent and competent bank experts;

Versus settlements by cash via a deposit safe box, in case of settlements by a letter of credit there is in principle no threat of receiving false banknotes or banknotes of criminal origin.

SPEED AND OPERATIONAL EFFICIENCY OF SETTLEMENTS

If there is a cash cover, B&N Bank (Joint-Stock Company) guarantees opening a L/C on the day of filing in the application, and payment on the day of completion of documents verification. If there are corresponding agreements, the L/C Application can be sent by the Payer via the Internet Bank.

CONVENIENCE

A letter of credit can be opened and performed at any B&N Bank (Joint-Stock Company) supplementary office/branch office in the entire territory of the Russian Federation. The recipient should not be the customer of B&N Bank (Joint-Stock Company) and the funds can be transferred to his/her account in any bank of the Russian Federation.

CONFIDENTIALITY/h4>

Information about the transaction is available to the minimum number of participants. The Customer does not have to come in person in order to open a letter of credit or submit documents. The Customer can act via an authorized representative who can be an attorney acting both in the interests of the Payer and the Recipient.

LEGALITY

A letter of credit is a form of cashless settlements established by the RF legislation and the Bank of Russia. All L/C documents, extracts, letters and notices of banks, payment documents can be officially used at customs, legal, tax and other authorities for VAT return, various tax deductions, confirmations of ownership, etc. Thus, the customer does not have to provide additional confirmation documents proving legal origin of money.

All statements and extracts concerning L/C operations are provided free of charge.

Using letters of credit for settlements for sale and purchase of residential real estates, the Bank’s customers can get free consultations of B&N Bank specialists on payment terms of the contract, currency control, and transaction structuring, involve notaries, representatives of insurance and real estate companies if needed.

The number of documents presented for transactions with a real estate is minimal. As a rule, they include the account, a copy of the ownership certificate, a copy of the purchase and sale contract and the list of documents in a free form. All documents are strictly formalized and the possibility of their wrong execution is minimal.

Advantages of L/C settlements for operations with a real estate include lower cost of transaction versus use of deposit safe boxes taking into account costs of recalculation and check of authenticity of banknotes, rent of a safe box and cost of money transportation by special services/vehicles.


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