Globalization has effected a rapid and extensive growth of international business and commercial exchange of currencies in the world today. We have embraced this challenge in Skye bank by providing the access to do business across borders by empowering our international operations desk to deliver 24 hour transaction timelines to our customers. This is our service promise.

Foreign Trade

Form M processing

In accordance with Central Bank of Nigeria (CBN) guidelines, all imports into the country must be initiated with a Form M. The form is the basis of the inspection to be carried out by the inspection agents. The settlement mode is indicated on the form which could either be through letters of credit, bills for collection or not valid for foreign exchange (Direct remittances or Payment in advance).

A letter of Credit

It is a documented promise by the Bank on behalf of the customer (an importer) to pay a seller (exporter) an agreed sum of money within a specified time within the pre approved guidelines laid down in the letter of credit.

LOCs can be for any amount, in any given currency and is usually guided by a set of compliant documents set by regulatory agencies. They are payable AT SIGHT (As soon as the compliance documents are presented by the paying Bank) or At TERM (after a specified time, e.g 60, 90 day of sight or bill of lading date).

If the documents presented are not in line with the requirements of the agency and as specified in the letter of credit when received, payment will not be made unless the importer (customer) gives their authority to waive or amend the agreed condition.

The Bank is compelled to make payment as promised on an accepted letter of credit for as long as it satisfies all statutory controls and condition contained in the letter of credit have been met, irrespective of the quality of the goods being delivered.

Types of Letter of Credit

Revocable

This is an LC that can be cancelled or amended by the applicant or the Issuing Bank without prior notice to the Exporter.

Irrevocable

With an irrevocable Letter of Credit the Issuing Bank gives its irrevocable undertaking to pay if all the terms of the LC are met. The Issuing Bank can only amend or cancel its undertaking if all parties to the LC consent to the change.

Confirmed

A Confirmed LC is one to which a second bank, usually in the Exporter's country and at the Exporter's request, adds its own commitment (confirmation) that payment will be made. Confirmation is generally used when there is perceived to be some risk that the bank issuing the Letter of Credit may not be able to fulfil its obligation to pay. This could be due to bank failure or instability in the country of the Issuing Bank.

Unconfirmed

If the LC is unconfirmed, the Advising Bank merely informs the Exporter of the terms and conditions of the LC without adding its own undertaking to pay or accept under the terms of the LC.

Transferable

A Transferable Letter of Credit is one that can be transferred from the first Beneficiary to one or more additional Beneficiaries by the Transferring Bank. It is normally used in situations where a supplier sells through an intermediary or 'middleman' to the ultimate Importer and is in a strong enough bargaining position to insist upon payment by Letter of Credit. By using a Transferable Letter of Credit, the intermediary is able to provide payment by LC to their supplier without the need for their own credit line with the transferring bank. An LC is only transferable if it is expressly stated to be so by the Issuing Bank.

For alternative means of transferring currency for international trade or to transact international business please contact the international business desk directly on

Telephone: 00234 1 2703086

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Or contact the Yes center