Document background
The Divisible Letter of Credit is a sophisticated banking instrument used when a single letter of credit needs to be divided among multiple beneficiaries or for partial transfers. This document type is particularly relevant in South African trade finance, where complex supply chains or large commercial transactions require flexible financing arrangements. It outlines the conditions under which the credit can be divided, the rights and obligations of all parties involved, and the specific requirements for document presentation and payment. The document must comply with South African banking regulations, particularly the Banks Act 94 of 1990 and Exchange Control Regulations, while also adhering to international banking standards. A Divisible Letter of Credit is commonly used in scenarios involving multiple suppliers, sub-contractors, or when the primary beneficiary needs to transfer portions of the credit to other parties.
