UPAS L/C
Preamble:
The business world is constantly looking for favorable payment terms in international trade. Everybody
wants to position oneself in upper-side. UPAS L/C is such a mechanism to create win-win situation for all
the parties involved in the international trade; buyer-seller-banker. One of the biggest problem in trade
finance is the different interest between the buyer and seller, which the buyer always want to have longer
credit tenor, while the seller prefer to give shorter credit tenor to the buyer. This difference have given
financial institution an idea to develop a letter of credit that could accommodate both interest through
UPAS L/C.
UPAS L/C:
UPAS L/C, Usance Payable at Sight, is a derivative from the standard L/C type (Sight L/C & Usance L/C). It
is actually the combination between Sight L/C and Usance L/C. Simply saying, UPAS is a Usance L/C that is
payable sight basis to the seller (beneficiary), while the payment settlement from the applicant (buyer) to
the issuing bank will made on at the end of usance term.
Objectives of UPAS
1. To meet the client’s need.
2. To remain competitive in the market.
3. To use FC fund of the Bank.
Tenor:
