The Bankers Acceptance And Letter Of Credit agreement is a crucial trade finance document used in Malaysian banking operations to facilitate domestic and international trade transactions. It combines two important trade finance instruments: Bankers Acceptance (BA), which is a short-term financing mechanism, and Letter of Credit (LC), which provides payment security in trade transactions. The document is structured to comply with Malaysian banking regulations, particularly the Financial Services Act 2013 and Bank Negara Malaysia guidelines, while also adhering to international banking standards such as UCP 600. It is designed to accommodate both conventional and Islamic banking requirements, reflecting Malaysia's dual banking system. This document is typically used when businesses require trade financing facilities for import/export activities or domestic trade, providing detailed terms for facility utilization, documentation requirements, and payment procedures.
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1. Parties: Identification of the bank, applicant/buyer, and beneficiary/seller
2. Background: Context of the trade transaction and relationship between parties
3. Definitions: Key terms including banking terms, trade terms, and relevant UCP 600 definitions
4. Facility Terms: Core terms of the BA/LC facility including limits, tenure, and purpose
5. Conditions Precedent: Requirements to be met before facility utilization
6. Drawing Procedures: Process and requirements for drawing under the facility
7. Payment Terms: Terms regarding acceptance, payment, discounting, and maturity
8. Documents Required: List of required trade documents and their specifications
9. Representations and Warranties: Standard banking facility representations and specific trade-related warranties
10. Covenants: Ongoing obligations of the applicant
11. Events of Default: Circumstances constituting default and consequences
12. Fees and Charges: All applicable fees, charges, and commission rates
13. General Provisions: Standard clauses including notices, amendments, and governing law
1. Islamic Banking Provisions: Additional terms for Shariah-compliant facilities, used when the facility is Islamic-based
2. Multiple Currency Provisions: Additional terms for multi-currency facilities, used when multiple currencies are involved
3. Counter-Indemnity: Additional indemnity provisions, used for back-to-back LC arrangements
4. Transferability: Terms regarding transfer of LC rights, used when LC needs to be transferable
5. Syndication Provisions: Additional terms for syndicated facilities, used when multiple banks are involved
6. Agency Provisions: Terms regarding appointment of facility agent, used in syndicated or complex arrangements
7. Security Provisions: Terms regarding collateral and security, used when facility is secured
1. Facility Limits and Sublimits: Detailed breakdown of facility limits and any sublimits
2. Fee Schedule: Detailed breakdown of all fees, charges, and commission rates
3. Form of Drawing Notice: Standard format for facility utilization requests
4. Form of LC Application: Standard letter of credit application form
5. Form of BA Draft: Standard format for bankers acceptance drafts
6. Required Documents Checklist: Detailed checklist of required documents for different types of trades
7. Specimen Signatures: Authorized signatories and specimen signatures
8. Standard Trade Terms: Applicable trade terms and conditions (e.g., UCP 600 terms)
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
International Trade
Manufacturing
Import/Export
Commodities Trading
Retail
Wholesale
Agriculture
Mining
Construction
Shipping and Logistics
Relevant Teams
Legal
Trade Finance
Credit Risk
Compliance
Banking Operations
Islamic Banking
Treasury
Corporate Banking
International Banking
Documentary Credits
Risk Management
Relevant Roles
Trade Finance Manager
Credit Risk Officer
Compliance Officer
Legal Counsel
Banking Operations Manager
Trade Operations Officer
Relationship Manager
Credit Analyst
Islamic Banking Officer
Documentary Credits Specialist
Treasury Manager
Chief Financial Officer
Import/Export Manager
Banking Products Manager
Risk Management Officer
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