Import Services

Letter of Credit Issuance

Provide assurance to your suppliers when they present the required documents

Build relationships with clients and support new business opportunities with a DBS Letter of Credit. We issue a Letter of Credit at your request, assuring payment up to a stated amount within a prescribed time. We then check that the documents received are in compliance with the Letter of Credit terms and certify them before you make payment.

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How does a Letter of Credit work?



  1. The buyer and seller enter into a contract and agree that payment be made on the basis of Letter of Credit
  2. Buyer approaches DBS (issuing bank) to issue Letter of Credit in favour of the seller
  3. DBS issues Letter of Credit which is advised through its branch or correspondent bank (advising bank) in the seller’s country
  4. Advising bank advises Letter of Credit to the seller
  5. Upon receipt of the Letter of Credit, the seller prepares shipment and delivers documents to presenting bank
  6. Presenting bank despatches documents to DBS for payment
    1. DBS pays the presenting bank upon verifying the documents are in order
    2. Upon receipt of payment, presenting bank pays the seller
  7. Buyer pays the document amount to DBS
  8. DBS forwards the documents to the buyer, who can now use them to obtain the goods


Why choose DBS Letters of Credit Issuance?

  • Grow your business with the Best Trade Finance Bank in Singapore, as named by Alpha Southeast Asia and The Asian Banker in 2012. We also received this accolade from Global Finance in 2012, for the 8th consecutive year
  • Leverage our "AA-" and "Aa1" credit ratings to provide your sellers with assurances of payment through our Letters of Credit
  • Enlist the help of our specialists, who offer advice and expertise
  • Save time and ensure faster delivery by applying for a Letter of Credit online through IDEAL™, our online banking platform
  • Ensure payments are only made after the necessary documentation is received and checked by our experienced and certified documentary checker
  • Submit forms any time before 6pm (on a working day) to ensure your documents are processed on the same day. We offer one of the latest cut-off times in Singapore for your convenience

Product Details

Common types of Letter of Credit:

Sight Letter of Credit

The issuing bank will honour the payment at “sight”, which means the payment will be made once the documentation received is in order

Usance Letter of Credit

The issuing bank will accept the draft once all documentation received is in order and agree to pay on the maturity date

Red Clause Letter of Credit

This allows the issuing bank to make partial advance payment to the seller upon receipt of the documentation. This is commonly used in manufacturing industries

Transferable Letter of Credit

This is usually used by middleman traders who do not enjoy a credit facility.  DBS will transfer the Export Letter of Credit in favour of the ultimate seller at the request of the middleman, who will then sell the goods under the Export Letter of Credit

Back-to-Back Letter of Credit

This is used by middleman traders with a credit facility. The master Export Letter of Credit from the buyer’s bank backs the issuance of an Import Letter of Credit. Proceeds from the master Export Letter of Credit are then used to pay the bank under the Import Letter of Credit

Standby Letter of Credit

This is typically used to assure the applicant will meet the payment obligations or contractual performances specified. Another commonly used product in this situation is a Banker’s Guarantee




1/8% per month. Min two months or SGD 80, whichever is higher

Pre-advice of Letter of Credit (Telex/SWIFT)

SGD 50

Usance Letter of Credit acceptance / deferred payment commission

1/8% per month from the expiry date to the due date. Min SGD 80

Discrepancy fee

USD 80 (or SGD 110)



· Extension expiry/validity

1/8% per month on outstanding balance. Min SGD 80

· Amount

1/8% per month on the increment. Min two months or SGD 80, whichever is higher


SGD 80

Withdrawal of application before issuance

SGD 50

Processing fee under advance payment arrangement**



Can you issue a Letter of Credit to my seller if I do not have a DBS credit facility?

No, you must obtain a credit facility with DBS before we can issue a Letter of Credit to your sellers. Please call us at 1800 222 2200 (if you’re in Singapore) or +65 6222 2200 (if you’re calling from overseas) should you require a credit facility.

How do I complete the Letter of Credit application form?

Please refer to our comprehensive explanatory notes or call DBS Business Care at 1800 222 2200.

Can DBS issue a Letter of Credit if the seller doesn’t provide the advising bank’s information?

Yes. We issue the Letter of Credit and advise through our network branch or agent bank in the event that we do not have a branch or office in the seller’s country.

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Best Trade Finance Bank, 2012, Alpha Southeast Asia

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"DBS helps us a lot in establishing whether the market, bank and customers are good enough for us."
Mr Chandru Dadlani
Mr Chandru DadlaniDirector

Aakash International Pte Ltd

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