Domestic L/C in IRR refers to a term of payment and service that is established by the Bank at the request of a buyer (applicant) for purchase or order placement for goods or services from a domestic seller/beneficiary in his favor.
Opening domestic L/C in IRR is possible for and more than the sums of 500.00 Million Rials.
The bank opening the L/C irrevocably undertakes the payment of price of goods/services purchased in case of submission of the compliant documents according to credit conditions by the beneficiary.
The buyer/applicant refers to the bank and requests for opening domestic L/C in IRR according to bank requirements and criteria. As announced by the Bank, the buyer/applicant should pay the fixed amount of down payment to the bank account and submit the required pledges accordingly.
The seller/beneficiary is the party to contract with the buyer/applicant and then domestic L/C in IRR his favor will be opened.
Domestic L/Cs in IRR is opened according to the contract of reward.
Opening L/C may be at sight or long-term (usance or refinance) type. When opening the L/C according to the approvals issued, partial amount of credit is collected from the customer as down payment at time of opening the L/C and the remaining will be provided by the customer upon delivery of documents and paid to the corresponding accounts. Guarantee for remaining amount of credit shall be made in return for valid pledges according to the current regulations of the Bank.
At the request for benefiting from loan facilities in IRR by the customer (except for governmental organizations and companies), at first, opening the L/C of the said request is reviewed and then in case of agreement and after obtaining the corresponding documents, the respective branch may provide the remaining amount of credit through conclusion of sales contract by installment at production sector or civil partnership contract at commercial and service sector within the scope of powers delegated.
Documents needed for opening domestic L/C in IRR:
- ID records;
- Inquiry for loan facilities and bounced checks;
- Obtaining financial statements and last tax declaration according to the last current instructions of the Bank;
- Examining the credit eligibility of the applicant and validation;
- Validation of the guarantors;
Acceptable Pledges by the Bank:
- Property pledges;
- Time bank deposits;
- Partnership bonds;
- Bank guarantee;
- Promissory notes signed by two valid obligors accepted by the Bank;
- Cash sum and other pledges accepted by the Bank confirmed by credit approval authority;
Maturity date of domestic L/C in IRR is given as one year as of opening date of the said L/C.