Standby Letter of Credit (MT 760) is a written commitment of a bank that issues it to pay a certain amount of money on behalf of the bank’s client in favor of a beneficiary in case the client/buyer is not able to fulfil its financial obligation to the beneficiary/seller.

Using an SBLC in business transactions is an indication of good faith and proof of financial credibility and repayment capabilities of a buyer.

SBLC is widely used in commodities trading when it is necessary to buy the goods from a local supplier or foreign exporter. SBLCs can also be used as a security to obtain credit lines and is ideal for a company that plans to expand its business but does not want to utilize its assets.

SBLC should always be issued as an irrevocable financial instrument and cannot be cancelled or revoked since it has been issued and transmitted via authenticated MT 760 SWIFT message by an issuing bank. It is possible to assign an SBLC to another beneficiary in accordance with written instructions from the first beneficiary. The bank, which performs such transfer, must notify the issuing bank the amount to be transferred and the effective date of the transfer.

Standby Letter of Credit is provided according to the latest uniform rules ICC Publication No. 600.