The Credit Letter in Business Communication is a crucial document in Indonesian business and banking operations, typically used when a company requires formal credit arrangements or facilities from a banking institution. It serves as an official instrument under Indonesian banking law, particularly regulated by Law No. 10 of 1998 on Banking and supervised by both Bank Indonesia and the Financial Services Authority (OJK). The document is essential for businesses seeking to establish credit relationships with banks, whether for working capital, trade finance, or other business purposes. It contains specific credit terms, conditions precedent, security requirements, and compliance obligations, all structured within Indonesia's legal framework while also accommodating international banking practices where relevant. The document's format and content must adhere to strict regulatory requirements while maintaining clarity and enforceability in business communications.
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1. Letter Header: Official letterhead, date, reference number, and address of both the issuing bank and the beneficiary
2. Subject Line: Clear indication that this is a Credit Letter with reference numbers
3. Credit Amount: Specified amount of credit in numbers and words, including currency denomination
4. Credit Terms: Key terms including validity period, interest rate, and repayment conditions
5. Purpose of Credit: Clear statement of the credit purpose and intended use
6. Security/Collateral: Details of any security or collateral required
7. Conditions Precedent: Conditions that must be met before the credit becomes effective
8. Bank's Undertaking: The bank's commitment and obligations regarding the credit
9. Authorized Signatories: Names and signatures of authorized bank officials
1. Special Instructions: Used when specific handling or processing instructions are required
2. Transfer Provisions: Include when the credit letter is transferable to other parties
3. Governing Law Statement: Added for international transactions to specify applicable law
4. Force Majeure Clause: Include when specific force majeure provisions are necessary
5. Anti-Money Laundering Declaration: Required for high-value transactions or when dealing with certain jurisdictions
6. Dispute Resolution: Added when specific dispute resolution mechanisms need to be specified
1. Schedule A - Supporting Documents: List of required supporting documents such as financial statements, business licenses
2. Schedule B - Fee Schedule: Detailed breakdown of all applicable fees and charges
3. Schedule C - Terms and Conditions: Detailed terms and conditions of the credit facility
4. Appendix 1 - KYC Documentation: Required Know Your Customer documentation
5. Appendix 2 - Credit Application Form: Completed credit application form with supporting details
6. Appendix 3 - Security Documents: Copies of security or collateral documentation where applicable
Authors
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
International Trade
Manufacturing
Retail and Distribution
Import/Export
Construction
Agriculture
Mining and Resources
Technology and Communications
Logistics and Transportation
Real Estate
General Commerce
Relevant Teams
Finance
Treasury
Legal
Compliance
Risk Management
Corporate Banking
Trade Finance
Credit Administration
Business Operations
Company Secretariat
Relevant Roles
Chief Financial Officer
Finance Director
Treasury Manager
Credit Manager
Banking Relationship Manager
Financial Controller
Corporate Banking Officer
Trade Finance Manager
Risk Management Officer
Compliance Officer
Legal Counsel
Company Secretary
Business Development Manager
Account Manager
Finance Operations Manager
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