Document background
A Letter of Credit Promissory Note is commonly used in Saudi Arabian international trade and banking transactions where additional payment security is required in letter of credit operations. This document type is particularly relevant when dealing with large-scale commercial transactions or when multiple banking parties are involved across different jurisdictions. The document combines the unconditional payment promise of a promissory note with specific references to an underlying letter of credit, providing an additional layer of security for the beneficiary. It must be structured to comply with Saudi Arabian banking regulations, SAMA guidelines, and Shariah principles, making it a unique instrument that bridges international banking practices with local legal requirements. The document typically includes specific payment terms, letter of credit references, and necessary declarations for Shariah compliance.
