Unconditional Letter Of Credit Template for Saudi Arabia

The Unconditional Letter of Credit is a fundamental banking instrument used in both domestic and international trade transactions within Saudi Arabia. It serves as a secure payment mechanism where the issuing bank makes an irrevocable commitment to pay the beneficiary without imposing conditions beyond the presentation of the letter itself. This document is particularly valuable in the Saudi Arabian context, where it bridges the requirements of international commerce with local Sharia-compliant banking practices. It is commonly used in situations requiring absolute payment security, such as large commercial transactions, international trade, or significant domestic deals. The document must comply with Saudi Arabian banking regulations, including Saudi Central Bank (SAMA) requirements and Sharia principles, while often incorporating internationally recognized banking practices such as UCP 600 guidelines. This makes it a highly reliable and widely accepted financial instrument in both domestic and international business operations.

1. Letter Header: Issuing bank's letterhead, reference number, and date of issuance

2. Credit Number: Unique identification number of the Letter of Credit

3. Beneficiary Details: Full name and address of the party in whose favor the LC is issued

4. Applicant Details: Full name and address of the party requesting the LC

5. Issuing Bank Details: Complete details of the issuing bank including SWIFT code

6. Amount and Currency: Specified amount and currency of the Letter of Credit

7. Type and Form: Specification that this is an Unconditional, Irrevocable Letter of Credit

8. Expiry Details: Expiry date and place of the Letter of Credit

9. Payment Terms: Conditions and timing of payment, confirming unconditional nature

10. Governing Law: Specification of Saudi Arabian law as governing law

11. Bank Authorization: Authorized signatures, stamps, and authentication details