If you do foreign trade business, by offering XacBank’s payment guarantee to your foreign business partners, you can minimize the payment risk, thus creating an opportunity for your business to receive more favorable conditions (e.g. deferred payment instead of prepayment).
Trade with foreign partners brings specific risks. In view of this, guarantees are an important instrument within international trade to ensure that services are performed. A guarantee in this context is an abstract, standalone promise independent of the underlying transaction to make a payment at the beneficiary's request.
Advantages:
- Strengthens the credibility of your business as seen by the counterpart;
- Ensures further effective cooperation with your counterpart as you will not have to commit your own money to secure the transaction;
- Expands customer’s commercial activities (participate in bids, receive orders for delivery of goods or services, etc.);
- Lowers your cost of funding.
For the beneficiary:
- Limits the risk of counterpart's default against contractual terms and conditions;
- Efficiently collects your receivables with the use of the guarantee;
- Increases security of trade transaction with your counterpart.
Fees and commissions:
terms | fee |
---|---|
Advising fee | USD 15 |
Inform of amendments to terms and conditions | USD 10 |
Issuance of a foreign bank guarantee | 0.1% |
Min. USD 50 | |
Max. USD 150 | |
Inquiry from a foreign bank | USD 20 |
Cancellation of a guarantee | USD 40 |
Monthly rate of risk fee for uncovered guarantees is as per decision by the credit committee of the Bank. | |
Uncovered DC credit analysis fee is as per standard terms and conditions of the Business | |
Additional fees associated with the foreign bank services and courier may apply for the account of the applicant | |
Domestic bank guarantee service fees: | |
Issuance of a bank guarantee | MNT 15,000 |
Amendment to terms and conditions | MNT 5,000 |
Cancellation of a guarantee | Covered - free of charge |
Uncovered - MNT 10,000 | |
Uncovered DC credit analysis fee is as per standard terms and conditions of the Business Loan. | |
Monthly rate of risk fee for uncovered guarantees is as per decision by the credit committee of the Bank. |
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