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Non Transferable SBLC for Malaysia

Non Transferable SBLC Template for Malaysia

A Non-Transferable Standby Letter of Credit (SBLC) under Malaysian law is a financial instrument issued by a bank that provides a guarantee of payment to a beneficiary under specific conditions, while explicitly prohibiting transfer or assignment to another party. This document, governed by Malaysian banking regulations and financial services laws, particularly the Financial Services Act 2013, serves as a contingent payment mechanism that can only be utilized by the original named beneficiary. It includes detailed terms regarding drawing conditions, document requirements, and compliance with Malaysian banking practices and international standards such as ISP98.

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Non Transferable SBLC

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What is a Non Transferable SBLC?

The Non-Transferable Standby Letter of Credit (SBLC) is a crucial financial instrument in Malaysian banking and international trade, providing security and payment assurance while maintaining strict control over who can claim payment. This document is particularly vital when parties require a bank-backed guarantee but want to ensure the beneficiary rights remain with the originally named party. The non-transferable nature adds an additional layer of security and control, making it suitable for sensitive or high-value transactions. Under Malaysian jurisdiction, these instruments are regulated by the Financial Services Act 2013 and overseen by Bank Negara Malaysia, ensuring compliance with both domestic banking regulations and international banking practices. The document typically includes specific conditions for drawing, document requirements, validity periods, and explicit terms preventing any transfer or assignment of rights.

What sections should be included in a Non Transferable SBLC?

1. Parties: Identification of the issuing bank, beneficiary, and applicant

2. Background: Context of the SBLC issuance and the underlying transaction

3. Definitions: Key terms used throughout the SBLC document

4. SBLC Amount and Currency: Specification of the credit amount and currency

5. Validity Period: Effective date and expiry date of the SBLC

6. Non-Transferability Clause: Clear statement that the SBLC cannot be transferred or assigned

7. Drawing Conditions: Specific conditions that must be met for the beneficiary to draw on the SBLC

8. Required Documents: List of documents that must be presented for drawing

9. Presentation Process: Procedure for presenting documents and making claims

10. Bank's Obligations: Scope and limits of the issuing bank's obligations

11. Governing Law and Jurisdiction: Specification of Malaysian law and jurisdiction

12. Notices: Communication procedures between parties

13. Execution: Signature blocks and execution requirements

What sections are optional to include in a Non Transferable SBLC?

1. Partial Drawings: Include when multiple drawings are permitted under the SBLC

2. Force Majeure: Include when specific force majeure provisions are required beyond standard banking practice

3. Anti-Money Laundering Compliance: Include for high-value SBLCs or when dealing with certain jurisdictions

4. Electronic Presentation: Include when electronic document presentation is permitted

5. Automatic Extension Clause: Include when the SBLC may be automatically extended under certain conditions

6. Multiple Currency Provisions: Include when payments may be made in multiple currencies

7. Counter-Guarantee Provisions: Include when there is a counter-guarantee arrangement

What schedules should be included in a Non Transferable SBLC?

1. Schedule 1 - Form of Demand: Standard format for making a demand under the SBLC

2. Schedule 2 - Required Documents: Detailed list and format of required supporting documents

3. Schedule 3 - Bank's Standard Fee Schedule: Schedule of applicable banking fees and charges

4. Appendix A - Specimen Signatures: Authorized signatures for all relevant parties

5. Appendix B - Communication Details: Contact information and authorized communication channels for all parties

6. Appendix C - Underlying Transaction Details: Summary of the transaction or obligation being secured by the SBLC

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Malaysia

Publisher

Ƶ

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions

























Clauses

























Relevant Industries

Banking and Financial Services

International Trade

Construction and Infrastructure

Manufacturing

Oil and Gas

Real Estate Development

Import/Export

Telecommunications

Energy

Mining and Resources

Relevant Teams

Legal

Finance

Treasury

Trade Finance

Risk Management

Compliance

International Banking

Credit Administration

Operations

Documentary Credits

Relevant Roles

Trade Finance Manager

Credit Risk Officer

International Banking Officer

Treasury Manager

Financial Controller

Compliance Officer

Documentary Credits Specialist

Banking Operations Manager

Chief Financial Officer

Legal Counsel

Trade Operations Manager

Relationship Manager

Risk Management Director

Industries






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