Documentary Credit Comparison Table

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A quick guide to the most common types of Documentary Credit (DC).

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Which Documentary Credit is right for you?

In basic terms, a Documentary Credit (DC) is an undertaking by a bank to make a payment provided the terms of the DC are met. There are several types of DC – the main difference is that some are more suited to transactions involving middlemen or traders.

Here's a quick guide to the most common types of DC. If you require assistance in choosing the best payment method, please call 2951 3457 or 2951 3456.

DC Back-to-back DC Transferable DC Transferred DC Standby DC
Specific to transactions involving traders No Yes Yes Yes No
Buyer requires credit facility to issue DC Yes Yes* Yes No Yes
Degree of freedom to specify terms of DC High Medium** High Low High
Supplier is guaranteed payment if terms are met Yes Yes Yes Yes*** Yes
DC issued on a transaction-by- transaction basis Yes Yes Yes Yes No
Degree of ease for supplier to obtain finance High High High Medium High

*Terms may be better due to support of Master DC
** Some terms to follow Master DC
*** If the terms of the Transferable DC are met

Disclaimer:
Global Trade and Receivables Finance transactions may be subject to credit approval. Other restrictions, including specific country regulations, may apply. Foreign currency exchange rates may apply to certain trade transactions.

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