It’s a new year. But it may seem surprisingly like the old year when you deal with your banker trying to handle letters of credit.
We’ve participated in a number of conference calls the last couple of months and have heard remarkable stories about some of the difficulties our clients have had with their banks. For instance:
One North American client went to the trouble of opening an account with a top 25 bank in London to receive in an LC from south Asian country. His bank received in the letter of credit all right. They just didn’t do anything with it, not even advising it. For six months the LC sat in limbo at the bank, with no movement. The problem eventually resolved itself when the transaction disappeared.
A client in the Eurozone reported to us that only one bank in their entire country would now handle letters of credit. And not eagerly.
We’ve had other clients in southern European countries reporting difficulties in getting their banks to handle incoming letters of credit well.
All banks are not the same. Our working group has found that some banks handle trade finance better than others, some banks are more familiar with certain countries in the world than others, and some banks are more aggressive in developing this business than others.
If you find that your bank is not as responsive as it could be, it may not be the fault of the bank. You may be asking them to do things that are not within their comfort zone. Sometimes the trick is to find the bank that fits what you’re doing. If that’s the kind of problem you’ve been having, get in touch. We may be able to match you with a bank that’s much better for the business you’re developing.
You may also have the sense that there are too many layers between you and the department processing letters of credit. If that’s the case, we may also be able to assist with solutions.
Because our working group interacts with banks around the world daily, we are well positioned to add value by matching you with a bank that can handle your specific needs in negotiating letters of credit, not to mention getting you paid much more quickly. All it takes is the right kind of preparation in advance to avoid the snags that can arise.
You’ve probably seen in our recent messages that we’re able to handle the equivalent of back to back letters of credit without the cumbersome, slower process of having two letters of credit to negotiate.
If we can assist you with this or with some of the other issues about banks that we discussed earlier, please get in touch with us.
And if you have friends who can benefit from the value we can add, please lend them a hand, get them in contact.