Trade Finance

Easy to use and quick to pick up!

 

AIB has established a strong presence globally in Trade Financing through its correspondent banks. The Bank has conveniently maintained relationships with major banks in the international financial market and continues to develop new ones wherever needed. Our Trade Finance services include a full range of import, export and guarantee products, thus offering tailor-made solution to fit the individual need of each customer.

 

AIB Continues to be the number one bank active in Trade Finance in Afghanistan. The economic activities in Afghanistan have seen an increase in trade activities and correspondingly our expertise in imports, exports and guarantees have been supportive.

 

AIB provides a wide variety of products to help finance Afghanistan’s rapidly expanding international trade. Our trade finance solutions help our clients prudently conduct both domestic and international trade. AIB handles import and export letters of credits and a variety of guarantees.

 

Our Trade Finance services include the following:

 

Letter of Credit:

It is a firm undertaking by a bank, on behalf of an importer, to pay the exporter value of the goods within a specified time, provided the exporter presents appropriate documents to the bank as required by the Letter of Credit (LC).

Intended Usage:

Corporate, Business and Personal Sector customers involved in import/export trade.

 

Features:

·         LC issued by importer’s bank

·         Credit terms and currency of payment may be negotiated

·         Credit may be confirmed by a bank in the exporter's country

·         Known payment date and revenue

·         LC can provide for payment at sight or tenor
(deferred payment, say 30, 60, 90 days or more)

·         Customer instructs own bank to issue LC and also to specify terms

·         Credit terms, price and currency of payment may be negotiable

 

Benefits
To the Importer:

 

 

·         Able to control terms and reduce risk

·         Can predict cash flow and price goods accurately

·         Is in a better position to negotiate for better terms

·         Can obtain extended credit by having tenor LCs

·         Opening of Import Letter of Credits (sight/usance) with or without adding confirmation.

·         Handling of Import Bills on collection basis

·         Providing of Finance against import merchandize.

·         Credit reports on overseas suppliers.

 

To the Exporter:

·         Payment assured without affecting own bank limits

·         Enhanced competitiveness

·         Predicted cash flow

·         Exporter may save costs of other credit insurance

·         Access to local help and advice

·         Country risk eliminated by an accepting bank in exporter’s country

 

Bank Guarantees (Bid Bonds, Performance Bonds, and Advance Payment Guarantees):

 

A Bank Bond/Guarantee is a written undertaking, either conditional or unconditional, issued by the Bank at the request of our client to guarantee his obligations to a third party/beneficiary.

The most commonly used types of bonds are Bid/Tender, Performance Bonds, Advance
Payment Bonds and Retention Bonds.

 

How it works:
Should our client not comply with his obligations under the contract, leading to a claim under
the Bond/Guarantee, then AIB will make financial recompense in accordance with the terms of the Bond/Guarantee. Under the bond, the beneficiary is indemnified for a stated amount against presentation of a written demand and/or any other documents called for by the guarantee, evidencing that the client has failed to fulfill his/her obligations under the underlying transaction.

 

Key Features and Benefits

·         Specialist support for contracts

·         Helps the development of business

·         Could help to minimize costs

·         Could help to minimize risk

·         Available in local or freely traded currency

It is common for buyers to insist on the provision of a bond or guarantee from a seller as a standard requirement to secure the terms of a contract. Our bonds, guarantees and indemnities normally specify a sum of money which must be paid on demand, provided that the terms and conditions are met.

 

Improves Trading Opportunities:

Knowing that we can fulfill your bonds and guarantees’ requirements on your behalf could enable you to tender for business that you may previously have considered out of your reach.

Normally, bonds and guarantees can be issued in the currency of your overseas buyer, which can make your proposition more attractive to the buyer and potentially help you to negotiate improved contract terms.

Flexible:
The format and wording of bonds and guarantees can be drafted, within certain criteria, to suit the particular requirements of both the buyer and the seller involved in the contract.

Helps Minimize Costs:

We offer a range of bonds and guarantees so you can fulfill all your bonding requirements from one source without the time-consuming and costly process of having to liaise with a number of different suppliers.
 

Attractive Features and Benefits:      

·         Most competitive interest rates in the market

·         Finance can be availed in AFN, US$ and EURO

·         Letter of Credit issuance to a wide range of destinations

·         Transmission of LC via Swift Network

·         Confirmation by Commerzbank Germany or the Asian Development Bank upon request

·         Reduces the risk of losing title to the goods before receiving payment

·         Improves cash flow control

·         Payment of any value may be collected in any freely traded currency.

·         Payment can be received immediately on presentation of the documents or on an agreed future dated

Customer needs that may be satisfied by this product:

·         To trade overseas and receive payment for exports

·         To retain some control of exports until payment or acceptance of future payment is obtained

·         To control cash flow

·         To manage foreign currency exposure

Related Products and Services

·         Foreign currency accounts

·         Foreign exchange services

·         Export trade finance

·         Trade information services

·         International payment and collection services

·         Advice on overseas trade