Letter_of_Credit - Letter of Credit Click to edit Master...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Click to edit Master subtitle style 5/30/11 Letter of Credit
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
5/30/11 In international trade the problems are Buyers and sellers are unknown to each other They are from 2 different countries Government policies, legal process, regulation may very in each countries Currencies of these countries are different There is a conflict of interest of buye
Background image of page 2
5/30/11 Types of Trade settlements Based on the risk, protection, interest of the seller and buyer , trade settlements are . . 100% Advance payment Documentary collection by bank Deferred Payment Purchase / Discount of Bills Third Party guarantee
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
5/30/11 Letter of Credit The simple definition of LC is Banks conditional undertaking for payment “ . So it is An undertaking Given on behalf of the importer / Applicant Favoring the exporter / beneficiary To make payment Subject to fulfilling a condition namely
Background image of page 4
5/30/11 PARTIES TO THE LETTER OF Applicant Applicant which is also referred to as account party is normally a buyer or customer of the goods, who has to make payment to beneficiary. Issuing Bank (Opening Bank) The issuing bank is the one which create a letter of credit and takes the responsibility to make the payments on receipt of the documents from the beneficiary or through their banker. The payments has to be made to the beneficiary within seven working days from the date of receipt of documents at their end, provided the documents are in
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
5/30/11 Beneficiary Beneficiary is normally stands for a seller of the goods, who has to receive payment from the applicant. A credit is issued in his favour to enable him or his agent to obtain payment on surrender of stipulated document and comply with the term and conditions of the L/c.
Background image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 19

Letter_of_Credit - Letter of Credit Click to edit Master...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online