Woori Bank launches aval-based service
A model holds a sign promoting Woori AVAL service launched by Woori Bank, Sunday, Courtesy of Woori BankBy Lee Kyung-min Woori Bank has launched an “aval-based” service to help local firms complete safe business transactions with their foreign counterparts, it said Sunday. Woori is the first Korean bank to initiate the advanced, good faith-based financial service. Aval refers to a guarantee that a third party adds to a debt obligation.Under the Woori AVAL service, the bank will ensure payment to foreign exporters for goods imported by local firms in case the latter defaults, even when both parties have not signed a letter of credit (LC). Only large conglomerates and their affiliates maintain LC-based transactions, a complicated and time-consuming process for small- to medium-sized enterprise (SMEs) that don't have the same resources and manpower. “Establishing an LC-based business relationship remains the norm with large companies, but it takes several months to complete,” a Woori official said.“Furthermore, having necessary papers ready from related cer
May 19, 2019By Lee Kyung-min