Bank Comfort Letter Information
Bank Comfort Letter BCL (MT-799) also known as Bank Capability Letter, is a letter issued by a bank (provider bank) on behalf of their client /buyer who come into a contract to procure huge quantity of goods/merchandise from a seller confirming their financial ability to fulfill their commitment as per the agreed contract terms & conditions. It also shows that the buyer has sufficient funds or financially capable to complete the business deal. However, it should be clear that the Bank Comfort Letter does not mean any assurance of payment.
If a buyer is claiming that they’re capable financially to purchase a product through their bank by providing this notification via authenticated swift message MT-799, they are indirectly claiming that they have enough cash or the facility to acquire the credit needed to finance the business deal. The BCL provider – buyers’ bank shall issue a written declaration proving this fact and should be addressed to the supplier in connection to the Irrevocable Purchase Order or signed Sales & Purchase Agreement.
Bank Comfort Letter is an initial assurance provided by a buyer to their supplier for huge commodity contracts. It is among the ways to determine the buyer’s ability to pay. Since, if a buyer’s bank will not verify that their client capable to purchase the goods or merchandise at the initial stage of the trade deal in terms of providing BCL, then supplier can right away discern that the buyer will also not be able to provide the financial instrument (usually LC, SBLC or BG) required for the payment of the merchandise.
BCL is a statement of fact not a promise of financial obligation or commitment by a bank. A Bank Comfort Letter (BCL) is not at all equivalent to a Letter of Readiness or an RWA. BCL is simply an authenticated swift message from the buyer’s bank that affirms the buyer’s financial capability in terms of cash or credit facility, to pay for the goods or merchandise they want to buy.
Bronze Wing Trading L.L.C acts as a provider of Bank Comfort Letter (MT-799) from Top European Banks on behalf of their client to prove their financial capacity to buy a certain goods/merchandise as per their contract with the supplier.
Bank Comfort Letter Procedure
To obtain Bank Comfort Letter (BCL MT-799) from Bronze Wing Trading L.L.C. please follow the below procedure:
1. Buyer presents their trade deal requirement by submitting buy and sell agreement or proforma invoice.
2. BWT will do due diligence on the trade transaction between importer/buyer & exporter/supplier and informs the concerned party if the BCL application is approved or not.
3. If approved, BWT will ask their client to submit further documents and payment being their BCL charges.
4. Upon receipt of documents and BCL charges, BWT will proceed right away and will establish the Bank Comfort Letter from their bank account with European Bank via authenticated swift MT-799 to the supplier’s bank.
Bank Comfort Letter Video