Trade finance services

Modern solutions for international operations of corporate clients

Being the major foreign bank in Uzbekistan, Ipoteka Bank has built partnerships with prominent international banks to offer advanced forms of documentary payments and trade finance instruments aligned with global standards for Corporate Clients who are increasingly committed to expanding their businesses and enhancing their international trade.

The Trade Finance team of the Bank is dedicated to delivering high-quality and efficient trade finance solutions to Corporate Clients. The department operates in adherence to legislative and regulatory documents of the Republic of Uzbekistan, as well as international guidelines such as the Uniform Customs and Practice for Documentary Credits (ICC publication number 600, 2007 edition), including compliance with INCOTERMS 2010.

The Trade Finance services offered by the Bank includes Letters of Credit, Import/Export financing. These services are designed to meet the diverse trade finance needs of Corporate Clients and facilitate their international transactions in accordance with industry best practices.

Trade Finance products offer the following benefits

Access to alternative and cheaper lending sources for short and long-term projects
Minimize the risks related to non-delivery of goods and equipment
Reduce need to make advance payment, thereby enhancing the Client's financial position
Enable Clients to execute transactions according to international best practices

Import Letters of Credit with Post-Financing

Advantages:

Access to alternative and cost-effective sources of financing

Enables the implementation of both short-term and long-term projects without significant withdrawal of liquidity. It is cheaper than a traditional loan due to the attraction of resources from foreign banks.

Minimization of risks of non-delivery of goods or equipment

Payment is made strictly on the basis of documentary confirmation of the fulfillment of the agreed conditions.

Reduction of the need for advance payments

Preservation of working capital — minimizing the need to use own funds and advance payments.

Compliance with international best practices

All operations are carried out in accordance with international rules and standards, which increases the confidence of foreign trade partners.

100% payment to the exporter by a foreign bank upon shipment

The importer preserves working capital, while the exporter receives guaranteed payment in the shortest possible time.

Strengthening partnership relations

Documentary support ensures transparency of transactions and contributes to long-term cooperation.

Bank Guarantees

The Bank may act as a guarantor at the request of the applicant by providing a written commitment to pay the creditor or beneficiary a specified amount upon presentation of a payment demand. This guarantee serves as a form of security for the beneficiary, ensuring that they receive payment or compensation if the applicant fails to fulfill their obligations. A bank guarantee adds confidence and reliability to transactions, positively affecting various business deals and financial agreements.

There are various types of bank guarantees, including payment guarantees, performance guarantees, advance payment guarantees, tender guarantees, and customs guarantees.

Main terms of the agreement include

Beneficiary	Supplier of goods and services
Amount	In accordance with the concluded contract
Currency	Uzbek soum, US dollar, Euro
Period	In accordance with the terms of the contract
Fees	According to the Bank's tariffs
Payment period	Every 3 months during the guarantee period
Collateral	Vehicles, Real Estate, Equipment

To obtain a guarantee, the client must meet certain requirements and provide a specific set of documents

No overdue accounts payable
Positive audit opinion for the last three financial years
Positive credit history

Documents required to obtain a guarantee letter usually include

Application for a guarantee
Business plan
Financial statements
Collateral documents

It is also important to note that the Bank may request additional documents if necessary.

Why Choose Ipoteka Bank

International experience and partnerships with the world's leading banks
High level of security and reliability of transactions
Individual approach to financing structure
Support at all stages of foreign trade transactions

The interest rate may change depending on the conditions of credit resource sources as well as changes in the Bank's current interest rates.

Short Process of Import Letter of Credit with Post-Financing Execution

Contract signing between the Buyer and the Seller.
The Buyer submits an application to open a letter of credit at Ipoteka Bank.
Ipoteka Bank reviews and issues the letter of credit.
The confirming (financing) bank adds its confirmation.
The Seller’s bank notifies about the opening of the letter of credit.
The Seller ships the goods in accordance with the contract terms.
The Seller submits documents under the letter of credit to its bank.
The documents are forwarded to the confirming (financing) bank for verification. If the documents comply with the terms of the letter of credit, the confirming (financing) bank makes payment to the Seller, providing financing.
The confirming (financing) bank sends the documents and notification to the issuing bank.
Ipoteka Bank reviews the documents and transfers them to the Buyer.
The Buyer repays the principal and interest after the end of the deferred payment period.

Documents required to open a letter of credit with post-financing

Client’s application for financing.
Foreign trade contract with payment terms: letter of credit.
Business plan.
Financial statements.
Collateral documents.
Application for opening a letter of credit.

It is also important to note that the Bank may request additional documents if necessary.

Basic Terms

Financing term: from 1 to 3 years (depending on the type of goods)
Financing currency: USD, EUR (other currencies by agreement)
Collateral: collateral security of at least 125% of the letter of credit amount.
Repayment: the financing amount and the foreign bank’s commission are repaid in a lump sum at the end of the financing term or according to another schedule agreed by the parties (semi-annual / annual).
Letter of credit opening fee: a one-time fee of 1% of the letter of credit amount according to the Bank’s tariffs.
Bank margin: from 2% per annum depending on transaction parameters.
Foreign bank rate: determined individually for each transaction and communicated additionally.

The interest rate may change depending on the conditions of credit resource sources as well as changes in the Bank’s current interest rates.

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