Documentary Credit is a payment method in which the issuing bank, as per applicant’s (the Importer) request, undertakes to pay the prescribed amount for the beneficiary (the Exporter) or accept the draft issued by the beneficiary as long as the shipping documents are in conformity with the L/C terms and conditions.
In Indonesia, we also known ‘Surat Kredit Berdokumen Dalam Negeri (SKBDN)’, as well as L/C, SKBDN is also payment’s Guarantee for sale-purchase transactions in the territory of Indonesia. The difference, the L/C’s transaction is subject to international rules UCP 600, while SKBDN is subject to PBI no. 5/6/PBI/2003.
Shinhan Bank Indonesia, as per customer’s (the Importer) request, issues documentary credit to undertake to pay for the beneficiary (the Exporter) immediately or within the prescribed time limit as long as the presented documents are in conformity with all terms and conditions mentioned in L/C.
There are two types of L/C, as follow:
Shinhan Bank Indonesia makes the amendment of L/C as per customer’s request (the Importer).
Shinhan Bank Indonesia undertakes to make payment of L/C value upon receipt of shipping document in accordance with L/C terms & conditions or upon your acceptance of payment on discrepant shipping document.
Documentary Collection is a payment method in which an exporter assigns a bank, on their behalf, to collect the money based on the enclosed shipping document.
Shinhan Bank Indonesia receives ,checks, and notifies the arrival of the shipping document along with the related conditions from foreign bank, and then makes payment as per instruction of the foreign bank.
After Shinhan Bank informs you the arrival of the shipping document within a day, you must perform one of these two in order to be able to accept the document