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Non Recourse SBLC for Pakistan

Non Recourse SBLC Template for Pakistan

A Non-Recourse Standby Letter of Credit (SBLC) under Pakistani law is a specialized banking instrument where the issuing bank provides an irrevocable commitment to pay the beneficiary upon compliant presentation of documents, without maintaining recourse rights against the applicant. The document is governed by Pakistani banking regulations, particularly the Banking Companies Ordinance 1962 and State Bank of Pakistan regulations, while also incorporating international banking practices such as UCP 600 and ISP98. It includes detailed provisions for drawing conditions, document presentation requirements, and explicit non-recourse provisions, making it particularly suitable for complex financial transactions and international trade.

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Non Recourse SBLC

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What is a Non Recourse SBLC?

The Non-Recourse SBLC is a critical banking instrument used in Pakistan for securing complex financial transactions and international trade obligations. It provides beneficiaries with a strong payment guarantee from a bank while protecting applicants through its non-recourse nature. This document type is particularly relevant when parties seek to structure transactions with clear separation of liability and risk allocation. The Non-Recourse SBLC must comply with Pakistani banking regulations, including the Banking Companies Ordinance 1962 and State Bank of Pakistan directives, while also adhering to international banking standards. It typically includes comprehensive details about drawing conditions, presentation requirements, payment terms, and explicit provisions limiting the bank's recourse rights. This instrument is commonly used in project finance, international trade, and large commercial transactions where traditional recourse instruments may not be suitable.

What sections should be included in a Non Recourse SBLC?

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

2. Background: Context of the SBLC issuance, underlying transaction details, and relationship between parties

3. Definitions: Key terms used in the SBLC including banking terms, technical definitions, and specific terminology

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

5. Term and Expiry: Validity period of the SBLC and expiration conditions

6. Drawing Conditions: Specific conditions and documentation required for drawing under the SBLC

7. Non-Recourse Provisions: Explicit provisions limiting the bank's recourse rights against the applicant

8. Payment Terms: Terms and mechanism of payment upon compliant presentation

9. Presentation Requirements: Detailed requirements for document presentation and compliance

10. Governing Law and Jurisdiction: Specification of Pakistani law as governing law and jurisdiction details

11. Notices: Communication procedures and contact details for all parties

12. Assignment and Transfer: Provisions regarding transfer or assignment of SBLC rights

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

1. Islamic Banking Compliance: Required when the SBLC needs to comply with Islamic banking principles

2. Counter-Indemnity: Optional section for partial indemnity arrangements, while maintaining non-recourse nature

3. Foreign Exchange Provisions: Required for cross-border SBLCs involving currency conversion

4. Electronic Presentation: Optional section for allowing electronic document presentation

5. Force Majeure: Optional provisions for extraordinary circumstances affecting SBLC operations

6. Anti-Money Laundering Compliance: Required for high-value or international SBLCs

What schedules should be included in a Non Recourse SBLC?

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

2. Schedule 2 - Required Documents: Detailed list of documents required for presentation

3. Schedule 3 - Fee Schedule: Breakdown of banking fees and charges

4. Schedule 4 - Authorized Signatories: List of authorized signatories for all parties

5. Appendix A - Underlying Transaction Details: Details of the transaction or obligation being supported by the SBLC

6. Appendix B - Communication Procedures: Detailed procedures for notifications and communications

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

Pakistan

Publisher

Ƶ

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions









































Clauses































Relevant Industries

Banking and Financial Services

International Trade

Construction

Manufacturing

Energy and Utilities

Infrastructure Development

Real Estate

Telecommunications

Mining and Resources

Import/Export

Shipping and Logistics

Relevant Teams

Legal

Finance

Treasury

Trade Finance

Risk Management

Compliance

International Banking

Corporate Banking

Documentary Credits

Project Finance

Relevant Roles

Trade Finance Manager

Corporate Banking Officer

Chief Financial Officer

Treasury Manager

International Trade Specialist

Banking Relationship Manager

Finance Director

Credit Risk Manager

Documentary Credits Specialist

Compliance Officer

Legal Counsel

Project Finance Manager

Industries








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Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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