ITA 403-0101-Types of Credits

ITA 403-0101-Types of Credits - Types of Credits...

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Types of Credits Irrevocable credits. Confirmed and unconfirmed credits. Clean and documentary credits. Straight credits (Direct credits) Freely negotiable credits Restricted credits.
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Irrevocable credits An irrevocable credit is one which cannot be cancelled or amended by the applicant or issuing bank without the knowledge and express consent of all parties, especially the beneficiary. Before 01 July 2007, under UCP 500, banks were allowed to issue revocable credits. Under UCP 600 banks are not allowed to issue revocable credits.
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Confirmed credits A confirmed credit is one upon which a second bank makes an independent and preceding undertaking to pay against a complying presentation. A confirmed credit is more expensive for both parties. Confirmed credit protects the exporter from country risks(political and transfer risks). Confirmed credits are restricted credits .
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Seller Buyer Confirmin g Bank and Adv. Bank
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ITA 403-0101-Types of Credits - Types of Credits...

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