Under the newly launched overnight document checking service, customers will be allowed to submit export letter of credit (LC) documents to the bank up until 6.00pm, with the commitment that any notice of discrepancy (NOD) will be delivered by 9.00am the next working day. If Standard Chartered does not meet the 9.00am deadline, the service guarantee offers customers the ability to get a discount on the commission fee paid on their next trade transaction.
According to Standard Chartered, the launch of this value-added product will increase cashflows for Singapore exporters through correcting document irregularities that often result in added fees. The bank estimates that approximately 70% of trade financing documents are irregular and by launching overnight document checking services it can reduce accrued interest costs and bank fees charged to clients for document discrepancies.
Although the products are available to all Singapore-based trade finance clients, Standard Chartered believes that small and medium sized enterprises (SMEs) will receive the greatest benefit from the service guarantee, given their lesser understanding of LCs. Multinational corporations, although less likely to have as many document discrepancies as SMEs, are also expected to be prime users of the new service.
Following the launch of the service guarantee to Singapore-based exporteres, the bank also plans to extend the service guarantee offering to importers on import letters of credit. The service is expected to start in September.
Currently, Standard Chartered also offers overnight document checking in other Asian markets including China, Hong Kong, India, Malaysia and Dubai and will treat the Singapore trade finance service guarantee as a pilot before it looks to extend it regionally.
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