BCA - Outgoing Letter of Credit

Outgoing Letter of Credit (L/C)

Letter of Credit (L/C)

A Letter of Credit (LC) is a written undertaking issued by the issuing bank at the request of the applicant to pay the beneficiary, provided that the documents presented comply with the terms and conditions of the LC.

Types of LCs include:

LC at sight (Sight LC)
Payment under the LC is made upon presentation of documents to the issuing bank.
Usance Letter of Credit (Usance LC) for the following transactions:
- Usance LC
  Payment under the LC is made at the end of the predetermined usance period.
- Usance Payable at Sight (UPAS) LC
  A Usance LC issued by BCA at the debtor's request, under which BCA provides financing to the debtor for a specified period, while payment to the beneficiary is made at sight.
- Usance Payable at Usance (UPAU) LC
  A Usance LC issued by BCA at the debtor's request, under which BCA provides financing to the debtor for a specified period, while payment to the beneficiary is made at the end of the usance period.

Note: The availability of a Usance LC facility does not automatically entitle the debtor to use the UPAS LC or UPAU LC facility. Prior approval from an authorized BCA credit approver is required.

Important Information

General Requirements for LC Facility

Terms and Conditions for Individuals
- Must have legal capacity
- Must be an Indonesian citizen
- Must not be declared bankrupt or be involved in bankruptcy proceedings
Terms and Conditions for Business Entities

Must be an Indonesian legal entity or business entity
Must comply with its Articles of Association and applicable laws and regulations
Must not be declared bankrupt or be involved in bankruptcy proceedings
Must have good credit reputation

BCA Giran Customers

When applying for a Letter of Credit (LC), the (prospective) borrower must submit the required legal documents, including:

Borrower Type	Required Documents
Individual	Copy of ID card
	Copy of spouse’s ID card^*
	Copy of Taxpayer Identification Number (NPWP)
	Copy of Family Card (Kartu Keluarga)
	Copy of marriage certificate^*
	Copy of divorce certificate or death certificate^*
	Copy of Property Division Agreement^*
Business Entity	Copies of identification documents of the management and shareholders
	Copy of Taxpayer Identification Number (NPWP)
	Copy of the Articles of Incorporation and all amendments thereto
	Copy of the Business Identification Number (NIB), Company Registration Certificate (TDP), or Trading Business License (SIUP)

* If applicable

The application process consists of the following steps:

The (prospective) borrower submits an application to a branch for an LC facility. If the facility is approved, the (prospective) borrower signs the Credit Agreement (PK) and the Collateral Pledge Agreement.
The (prospective) borrower completes the Export-Import Service Application Form, which must be approved by the borrower’s authorized representative.
If the (prospective) borrower wishes to apply for a letter of credit electronically, they must fill out the BCA Client Trade Application Form.

General Requirements for LC Transaction Application

The debtor completes the form "Application for Issuance of Letter of Credit or SKBDN (IND/ENG)" or applies for LC issuance services through electronic means via the application.
The goods purchased must be in accordance with the purpose of the facility application.
Issuance of an LC with a maturity date beyond the facility maturity date in the Credit Agreement (PK) may be done as long as the LC issuance does not exceed the credit limit and is issued within the facility drawdown period.

(Prospective) borrowers may submit questions or complaints through the following channels:

Contact Us:

Halo BCA 1500888

Email: halobca@bca.co.id

WA: +628111500998

Website: www.bca.co.id

Social Media:

Facebook : GoodLife BCA

Instagram : @goodlifebca

Youtube : Solusi BCA

X (Twitter) : @BankBCA

Main Features, Benefits, and Risks of LC

Main Features of LC

The LC facility is used to issue Letters of Credit (LCs) for the purchase of goods, including raw materials, finished goods, production machinery, and spare parts, and/or to make payments for services in international trade.
The credit limit is determined based on the borrower's needs and BCA's approval.
The facility has a term of 1 year and may be extended.
Types of LC facilities include:
- LC Line: A revolving LC facility that allows the borrower to issue multiple LCs during the facility term, subject to the approved credit limit.
- LC Case by Case: A non-revolving LC facility that allows the borrower to issue only one LC during the facility term.
Collateral for revolving LC facilities may include land and buildings, time deposits, inventory, accounts receivable, security deposits, or other forms of collateral approved by BCA. For non-revolving LC facilities issued on a case-by-case basis, the collateral must be in the form of cash collateral (BCA deposit products).
The parties involved in an LC are:

Parties Involved	Description
Exporter (Beneficiary)	The party that presents the documents required under the LC to receive payment.
Importer (Applicant)	The party that applies for the issuance of the LC and is responsible for making payment as the debtor.
Exporter's Bank (Advising/Negotiating Bank)	The bank that advises the LC to the Beneficiary and is responsible for verifying the apparent authenticity of the LC. If acting as a negotiating bank, it may also negotiate documents presented under the LC.

Importer's Bank (Issuing Bank)	The bank that issues the LC at the request of the Applicant and undertakes to make payment to the Beneficiary, provided that the documents presented comply with the terms and conditions of the LC.

The documents required as the basis for issuing the LC may include a contract.
LC transactions are subject to the Uniform Customs and Practice for Documentary Credits (UCPDC) issued by the International Chamber of Commerce, namely UCP No. 600 and all amendments and/or supplements thereto (if any) or any replacement that may be applicable in the future.
The LC is irrevocable, meaning it can only be issued on the condition that it cannot be amended and cannot be withdrawn (cannot be cancelled) without the approval of the Issuing Bank, the Confirming Bank (if any), and the Beneficiary

Benefits

Facilitates the purchase of goods in international trade.
Extensive correspondent banking network to support international transactions.
Competitive fees and service charges.

Risks

Banks deal with documents, not the goods to which the documents relate. Therefore, in a Letter of Credit (LC) transaction, the bank is not responsible for the goods received by the debtor.
If the debtor fails to fulfill payment obligations in accordance with the agreed terms, BCA reserves the right to take action in accordance with the applicable credit terms and conditions.
The debtor may incur late payment penalties if payment obligations under the LC are not fulfilled by the due date.
Exposure to foreign exchange risk arising from exchange rate fluctuations

Additional Information

The LC credit limit granted to the debtor is determined based on the results of BCA’s credit analysis.
LC obligations are settled by debiting the debtor’s account in accordance with the following provisions:

LC Type	Debit Process for the Debtor’s Account
Sight	BCA makes payment to the correspondent bank or debits BCA’s account with the correspondent bank based on the invoice for the documents required under the LC, on behalf of the debtor.
Usance, UPAS and UPAU	The debtor’s account is debited on the maturity date of the promissory note or acceptance signed by the debtor, or on the maturity date notified by BCA to the debtor.

BCA reserves the right to amend the benefits, fees, risks, and terms and conditions of this product and/or service. BCA will notify the debtor of such changes in any form and through any means in accordance with applicable regulations. The notification will be provided no later than 30 business days before the effective date of the changes.
If the debtor wishes to cancel or close an LC, written approval must be obtained from BCA as the Issuing Bank, the Confirming Bank (if any), and the LC beneficiary.
To close an LC facility, the debtor must submit a written request to a BCA branch. If there is an outstanding balance at the time of closure, the facility limit will be reduced to the amount of the outstanding balance. The collateral may be returned once all of the debtor’s obligations under the issued LC have been fully settled.

Fees

(Prospective) borrowers will be charged fees determined based on BCA’s assessment and analysis, including:

Credit facility administration fees as specified in the credit decision. If the credit limit or other terms and conditions change, the administration fee will be charged based on the revised terms and conditions.
Notary fees for notarizing the credit agreement.
Notary fees for registering collateral.
Insurance premiums for non-cash collateral.
Appraisal fees for non-cash collateral.
Late payment penalties for delinquent loans.
Fees related to the issuance and use of a Letter of Credit (LC), including LC issuance and amendment commission fees, Telex/SWIFT fees, LC draft cancellation fees, document handling fees, acceptance fees for Usance LCs, interbank LC settlement fees, and LC discrepancy fees.
For the issuance of UPAS and/or UPAU LCs, the borrower will be charged interest in accordance with BCA’s applicable regulations or as specified in the credit decision. Interest is calculated from the date BCA makes payment to the beneficiary until the borrower fully repays the amount owed to BCA.
Fees that may arise from the processing of credit-related activities are detailed below:

Collateral return and release fee: IDR 500,000 per collateral document.
Collateral document storage fee for borrowers who have fully repaid their loans: IDR 500,000 per month per borrower.

Note:

This fee information is general in nature and may be subject to change based on the credit decision or other applicable provisions. Any additional fees related to credit processing or other credit-related activities will be charged, and the relevant information will be communicated through appropriate channels in accordance with applicable laws and regulations.

Get the Services