Business Banking > Trade Finance
Trade Finance

With Bangkok Bank, you will get the backing of a leading Asian financial group with an overseas network spanning 13 economies across the globe.

This is why today our reputation for financial strength and stability is held with such high regard.  We offer a wide range of world-class services to offer our customers the finest financial advice and support in view of the wealth of knowledge and experience we have gained over the years. This is what we consider to be our greatest strength that allows us to give sound financial advice and provide a wide range of Trade services and financing products in order to suit our customers’ specific needs.
 
What really sets us apart and makes us an ideal business partner is that we are able to offer each and every one of our customers a highly personalized service. The kind of which comes from having deep insight.

Trade Finance Product Disclosure Sheets.pdf



Letter Of Credit

Letter of Credit will be issued on your behalf to your suppliers through our local and international network. Payment will be made upon full compliance of documents with the terms and conditions of the Letter of Credit.

Benefits:
  • Discrepancies in the documentation are minimized as documents are being checked by the bank
  • Risks are mitigated as Bank guarantees payment upon presentation of compliance documents

Shipping Guarantee
Shipping Guarantee is required when the imported goods ordered under an LC arrive at the port of destination before the transport document. The shipping company or carrier will not release these goods without the original transport documents (i.e. Bill Of Lading or Airway Bill). This may result in expensive delays for the Importer, as storage /demurrage charges must be paid.

As to assist the Importer to clear the goods, the bank may countersign a Shipping Guarantee as a temporary substitute for the transport document.

A Shipping Guarantee is an indemnity given by the consignee to a shipping company or its agent, so that the shipping company may release the merchandise to the consignee named in the Shipping Guarantee.
The bank countersigns the indemnity, thus make it liable. With the Shipping Guarantee, the Importer is able to clear the goods from the port.

As soon as the original transport document becomes available, it is sent to the shipping company then they will return the Shipping Guarantee to the bank for cancellation.

Benefits:
  • Goods can be cleared and obtained in a timely manner pending arrival of shipping documents
  • Eliminate storage or demurrage charges

Bank Guarantee / Standby Letter of Credit
A Bank Guarantee (BG) is an irrevocable obligation of a bank to pay a sum of money in the event of a non-performance a contract by the bank’s customer. This guarantee is a separate obligation, independent of the principal debt or the contractual relationship between the creditor and the principal debtor.

Types of BGs - Bid/Tender Bond, Performance Guarantee, Payment Guarantee etc.

A Standby Letter of Credit (SBLC) is used where guarantees are not acceptable for overseas or cross border arrangement to secure payment/facilities/performances.

Import Bills for Collection
Whereby a Seller (Exporter) upon shipment of goods to the Buyer (Importer) country, will then entrust all his shipping documents to his bank i.e. Remitting bank for collection of the proceeds. Upon received of the documents, Bangkok Bank, the Presenting/Collecting Bank (Buyer bank) will carry out the instructions against specific instructions such as -

Deliver documents against Payment (D/P) i.e. Sight - whereby Bangkok Bank will only release the documents to the buyer upon payment is received.

Deliver documents against Acceptance (D/A) i.e. Usance - whereby the Bangkok Bank will release the documents to the buyer upon acceptance of the seller's bills of exchange.
Benefits:
  • Cost-effective
  • Flexible and time saving as less rules and deadlines for document preparation

Bankers Acceptance
Bankers Acceptance is a usance bill of exchange drawn by the customer to his order, and accepted by his banker, and payable on a specified future date.

Bankers Acceptance is denominated in Ringgit (RM) drawn on and accepted by a bank in Malaysia and available to finance imports, exports and local trade. This is a short term financing instrument governed by Bank Negara Malaysia (BNM) Guidelines on Bankers Acceptances and the funding rate is based on the Interbank market on a daily basis.

Features -
  • Payable in Ringgit Malaysia on a specified future date, without days of grace with minimum 21 days from the date of acceptance
  • Minimum RM50,000.00 and in multiples of RM1,000.00
  • The maturity date should not fall on Saturday, Sunday or a public holiday
  • The rate is based on margin above prevailing Interbank market rates

Trust Receipt
Trust Receipt (TR) is a Trade Finance facility to finance Imports and local purchases of goods.

TR is a document executed by a customer, who is the pledger of the goods or documents of title thereto. The Bank will pay the Seller/Exporter and the title and goods are released to the customer upon receipt of the TR.
 
The TR form will state, amongst other things, that the customer :
-  acknowledges receipt of the documents of title to the goods
-  holds the goods as trustee for the bank
-  undertakes to pay the proceeds of sales to the bank
-  the period within which the customer will repay the bank
Benefits:
  • Interest is payable on maturity
  • Early or Partial payment is allowed

Foreign/Domestic Bills Purchased/Discounted
The Bank provides financing to the seller/exporter for their sight/usance domestic or export sales, whether is on Letter of Credit or Collection basis.

This will allow the seller/exporter to receive the funds immediately.
Benefits:
  • Improved Cash Flow and Competitiveness
  • Financing for domestic or foreign sales with or without Letter of Credit

Export Letter of Credit Advising
As an Advising Bank, Bangkok Bank will receive your incoming Letter of Credit from your supplier’s Bank’s through our local or overseas Correspondent Banks.

The Letter of Credit can be in the form of SWIFT, Mail or Telex.

Once the authenticity of the Letter of Credit is verified, we will advise the Letter of Credit to the Exporter (Beneficiary) or their Banker’s (the Second Advising Bank) accordingly.

At the request of the Issuing Bank or Beneficiary’s and by arrangement, Bangkok Bank may add confirmation whereas our liability as a confirming bank is similar to the Issuing Bank.

However, such confirmation will be solely at Bangkok Bank discretion and the acceptability of the terms and conditions of the Letter of Credit will be at the time the confirmation is added.

Export Bills for Collection
Whereby a Seller (Exporter) upon shipment of goods to the Buyer (Importer) country, will then entrust all his shipping documents to his bank i.e. Bangkok Bank, the Remitting bank for collection of the proceeds. Upon received of the documents, the Presenting/Collecting Bank (Buyer bank) will carry out the instructions against specific instructions such as -

Deliver documents against Payment (D/P) i.e. Sight - whereby the presenting bank will only release the documents to the buyer upon payment is received.

Deliver documents against Acceptance (D/A) i.e. Usance - whereby the presenting bank will release the documents to the buyer upon acceptance of the seller's bills of exchange.
Benefits:
  • Cost-effective
  • Flexible and time saving as less rules and deadlines for document preparation

Export Credit Refinancing (ECR)
The ECR scheme was introduced by BNM in 1977. Effective 1 Jan 1998, the scheme was taken over by Export-Import Bank Of Malaysia Berhad (Exim Bank).
The objective of the ECR scheme is to promote Malaysia’s exports and International Trade via 2 types of facilities:

1)   Pre-Shipment :  is an advance by Exim Bank to facilitate the export of Malaysian products and trade prior to shipment and to encourage the backward linkages between the exporters and local suppliers in export oriented industries.

2) Post-Shipment : is an advance to exporters to finance the export or trade after shipment
Benefits:
  • Competitive interest rates
  • Pre-Shipment provides working capital
  • Post-Shipment provides advance funds to the exporters to finance exporting of eligible goods after shipment