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Letter of Credit

Letter of Credit

Documentary credit (import): 

Is an irrevocable commitment submitted by the Saudi National Bank at the request of one of its customers, in which it pledges to pay a sum of money within an agreed period of time (by sight or deferred) in exchange for the customer receiving a service or a commodity. A documentary credit is used for the purpose of facilitating international and domestic trade. It helps customers to facilitate payments to local and foreign suppliers and provide a guarantee of fulfilling clearly stated terms of credit.

Through documentary credits (import) the applicant can specify the following:

  • Description of the goods or service required

  • Determining payment terms and term

  • Define shipping terms

  • Determine the required documents

The Saudi National Bank offers Letters of Credit in different types such as:

  • Revolving Letter of Credit

  • Transferable Letter of Credit

  • Stand by Letter of Credit


The Saudi National Bank also provide Shariah Compliant financing solutions to facilitate the LC payment through:

  • LC Murabaha

  • LC Refinance by Tawarruq (Tayseer)

Documentary Credit (Export):

The role of the Saudi National Bank is to advise the beneficiary / customer with the letter of credit, while verifies the validity of the letter of credit and makes a recommendation to the beneficiary.

The bank also undertakes to check and circulation of export documents/documents, and ensures that the documents are in conformity with the accreditation request, in addition to the credit enhancement service.

The beneficiary is required to deliver the documents to one of the branches and attach a form Covering Letter (Export LC Documents).

The Saudi National Bank also provide an early payment solution to discount the LC (with and without recourse on supplier).