You can make use of our letter of guarantee services written to addressee establishments and persons within Iraq. You can also make out your letters of guarantee that have been communicated to VakıfBank under counter guarantee of beneficiary banks abroad and you can have your debts and commitments to addressees abroad taken under the guarantee of VakıfBank. You can also make use of our letter of credit services via our widespread correspondent bank network and knowledge in the field of international banking.

Letter of Guarantee

The guarantee our bank gives that a job will be done, a debt will be paid or goods will be delivered. According to the relevant regulations, these letters can be issued in Iraqi Dinar or foreign currency for certain periods of time. Visit our branch for detailed information.

Receiving a Letter of Guarantee from Abroad (Counter Guarantee)

Our bank can also issue the letters of guarantee on behalf of our customers which is  by the beneficiary's order abroad and sent to VakıfBank under the counter-guarantee of the beneficiary's bank.

Sending Guarantee Letters Abroad (External Guarantee)

This is an irrevocable bank payment obligation made out to addressee establishments and persons abroad on business such as the delivery of goods, payment of a debt and giving a service. In the event that the commitment set forth by the letter is not fulfilled within the given time and according to the contract among the two parties, the amount specified in the letter will be paid to the addressee upon initial request. The fact that your debts and commitments to entities abroad are under VakıfBank guarantee will give your company flexibility and reliability in foreign trade transactions. Visit our branch for detailed information.

Letter of Credit

A letter of credit is a commitment that a bank (issuing bank) makes with the instruction of a buyer (issuer/importer) to a seller (beneficiary/exporter) that it will make a certain amount of payment within a certain period of time in exchange for the provision of the documents specified in the letter. In international trade, because the two parties do not know each other well and different exchange regimes are in place in different countries, the parties do not have trust for each other and are under mutual risk. The seller aims to collect the fee of its goods and the buyer aims to receive the goods specified in the contract in due time. If the seller does not abide by the conditions of the letter of credit, the bank will not make the payment. This establishes trust for the buyer. This is why a letter of credit carries the feature of being a payment type that constitutes great assurance for both sides.

Features

• With a letter of credit, unlike other types of payment, a bank guarantee is in place instead of the element of trust.
• It is also a trustworthy payment method for the issuer since the importer will know that the beneficiary won’t get paid unless it provides the suitable documents specified in the letter of credit.​

Advantages

It makes sure that the goods are shipped according to the terms of the contract and in time.
The exporter will know that it will get paid if it provides the necessary documents.

Parties

Issuer-Importer

The party that applies to its bank for the letter of credit after reaching a deal with the exporter.

Issuing Bank

The bank that issues the letter of credit in accordance with the instructions of the issuer. It takes on a commitment of final payment given that the conditions of the letter of credit are met.

Beneficiary

The seller who is the beneficiary of the letter of credit. If he abides by the conditions of the letter of credit, he will be paid or a commitment to make a payment will be made under the terms of the letter. 

Beneficiary Bank

The bank that communicates the issued letter of credit to the beneficiary. The bank of the exporter. It can confirm a letter of credit if requested by the exporter.

Visit our branch for detailed information.