Sberbank of Russia

07/13/2021 | Press release | Distributed by Public on 07/13/2021 09:24

Letters of credit on SberBank Online – not just for real estate anymore

Sber has expanded the scope of letters of credit on the SberBank Online mobile app. Previously, letters of credit were only available for purchasing real estate. Now, they can be obtained for purchasing other expensive goods (furniture, vehicles, etc.) and services (e.g., renovation work).

The system works as follows: the Sberbank partner in question, the company/seller, transmits the parameters of the deal to the bank along secure electronic communication channels. A request for a letter of credit is submitted and then appears in SberBank Online for the individual/purchaser. The client then accesses the app, familiarizes themselves with the conditions of the letter of credit, and confirms that it should be opened. The process takes under a minute. The client receives an SMS at each stage of the deal, notifying them that the request has been submitted, the letter of credit has been opened, and then that the conditions have been met.

Last year, we offered our clients the opportunity to apply for letters of credit for deals on the primary real estate market on SberBank Online, and then we expanded the service to cover the secondary market, too. Since its launch online, we have recorded a high level of interest in this tool. The number of letters of credit opened has risen by over 200%. We have decided to extend online letter of credit applications to purchases of other goods and services. A guarantee of secure settlements is important in many situations, especially when an order is particularly expensive. We are constantly striving to offer our clients convenient and quality remote services. Today, Sber is the only bank that allows its clients to open letters of credit in its mobile app.

Evgeny Kravchenko

Head of Trade Finance, Sberbank

The first deal under the new scheme was concluded in Moscow in partnership with furniture factory Maria. A letter of credit for the purchase of a kitchen was opened and honored. As soon as the client was satisfied that the furniture had been delivered in excellent condition, the bank transferred the funds to the company.

A letter of credit is a bank service that ensures clients do not have to worry about the outcome of a major deal. Sberbank takes responsibility for the processing of cashless transactions: the buyer deposits the funds in a letter of credit account with the bank, and the funds are then transferred to the seller only after they have met the conditions of the deal. The service represents a quick, secure way to protect the interests of all parties to a major deal featuring a non-cash transaction.

Letters of credit are relevant for when you are buying or selling real estate (including with a mortgage), exchanging apartments (participating in a contract of sale chain), buying or selling expensive property (e.g., equipment, vehicles, securities, shares in capital stock), or paying for expensive services (both individuals and legal entities).

Further information can be found on the bank's website. Partners can join the service by sending an application to [email protected].