The Trade Service is one of the core processes of the bank entrusted with the task of international banking services.
The services are now provided at all branches of the bank with a single contact point of customer service relationship officers assigned for this purpose only.
The following are major services provided:
- Documentary credit (L/C): is a written undertaking by a bank given to the seller at a request and/or the instruction of the buyer to make payment or accept and pay bill of exchanging (draft) drawn by the seller up to a stated sum of money within a prescribed time limit and against stipulated documents.
- Import-available by sight payment/negotiation payment/deferred payment*/acceptance payment*
- Export-payment available by sight/negotiation/acceptance of bills
*If approved by the National Bank of Ethiopia
- Documentary collection: is a method through which banks handle a seller’s commercial documents with or without financial documents in accordance with instructions received from the seller in order to deliver the documents to buyer (importer) against payment and/or acceptance or against other terms and conditions.
- Import-available by sight payment
- Export-available by sight payment/acceptance payment
- Advance payment: is a method through which a seller receives payment from a buyer prior to shipment or the agreed upon goods or rendering the agreed upon service.
- Import-Payment though bank transfers
- Export-Payment through bank transfers, traveler cheques, cash (as long as it is declared).
- Consignment basis payment: It is a method of payment in which the title to the goods remains with the seller until an agent (distributor) in foreign country sells them. Payment is made to the seller if and when the agent (distributor) sells the goods.
Export- it is applicable to perishable items: fruits, flowers, meat, molasses, etc as approved by the National Bank of Ethiopia
- Guarantee: A letter of guarantee issued by an issuing bank/guarantor is a written undertaking by the bank to compensate (pay sum of money) to the beneficiary (local or foreign) in the event that the obligator/principal fails to fulfill his/her /its obligations in accordance with the terms and conditions of the guarantee.
· Types of guarantee:
- Bid bond
- performance bond
- advance payment guarantee
- loan guarantee, retention guarantee
- customs duty guarantee
- Franco valuta license(permit): is a license issued to importers of goods on which no foreign exchange is payable.
- Small export items license (permit): is a license issued for small export items to tourists, foreign residents of Ethiopian nationals who wish to take souvenir, samples, gifts, repairs, replacements, exhibitions and personal effects and belongingness, etc.
Customers that request the above products of Trade Service, except guarantee should fulfill the following criteria:
- Should maintain current account with the bank
- Should be in the possession of valid trade license for import /export as appropriate or business license or investment or industry license or must exist in the list of budgetary government organizations issued by the National Bank of Ethiopia. In case of non-government organization, certificate issued by the Ministry of Justice, Regional Governments and offices authorized by proclamation.
- Should have Tax Identification Number(TIN)
- Should not be reported as delinquent by the NBE