Currently, in international payment, the Letter of Credit (L/C) is widely used. UPAS L/C brings many benefits to importers and exporters when doing business with international partners, as well as to traders in the domestic market when working with local partners.

Compared to an ordinary L/C, UPAS L/C allows the importer (buyer) to defer payments and allows the exporter (the seller) to receive immediate payments or earlier-than-deadline payments. At the same time, this document helps the buyer make quick and secure payments at a reasonable cost by saving 2-3% a year compared to conventional loan products. With this form of payment, the financing bank will pay the seller ahead of time and collect the principal and related fees from the customer on the maturity date of the L/C.

QT L.M Joint Stock Company, a user of UPAS L/C for purchasing, said, "This is a secure payment method as it helps avoid risks to buyers like the incorrect delivery schedule or failed delivery by the seller. In fact, UPAS L/C also helps buyers like us reduce financial costs by 20-50%.” Reportedly, this UPAS L/C is provided by An Binh Commercial Joint Stock Bank (ABBANK).

With outstanding features, UPAS L/C is favored in international and domestic payments. In the first five months of 2022, ABBANK recorded VND953 billion in UPAS L/C issues, including VND338 billion in May - the highest value in the year, 3.5 times higher than in April. The net revenue from international payment service fees was VND15.9 billion in the first five months of 2022, including VND6.1 billion from UPAS L/C service fee. This is a significant contribution to ABBANK's international payment and trade finance service fees.

“Recovering the import-export supply chain is one of the post-COVID-19 socioeconomic recovery measures. Understanding and accompanying customers, ABBANK focuses on offering preferential credit packages with attractive interest rates and offering timely funds to importers and exporters to enable them to secure sustainable recovery and growth," said an ABBANK representative.

In addition to UPAS L/C, the bank is applying many credit incentives for importers and exporters and domestic buyers using L/C.

Importers will be granted credit lines by ABBANK to use import financing, import payment and domestic L/C products with the value limit doubling the value of collateral assets. The margin requirement for L/C issuance is low, only 0% - 10%, depending on customer classification and collateral type.

Besides the collateralized limit, importers can be additionally granted (i) an "Additional limit" of up to 30% of the value limit of collateralized assets or real estate; (ii) “L/C limit without collateral” of up to 50% of the collateralized credit limit of customers at ABBANK; and (iii) “Unsecured import financing limit” of up to 50% of the collateralized credit limit at ABBANK or 50% of their owner's equity.

Exporters will be granted by ABBANK (i) “Credit line with collateral” and/or (ii) “Credit line without collateral” to finance pre-shipment/post-delivery export (loan, discount or L/C issuance) with a high financing rate of up to 98% of the value of the Export Contract/Order or L/C or Export Documents. Security requirements are also very flexible for them. In addition to tangible collaterals such as deposits, real estate, means of transport, machinery and equipment, inventories, debt claims, receivables from export documents and discounted documents may be accepted if relevant conditions are met.