Letter of Credit

Letter of Credit

- It is undertaking by bank to make payment to beneficiary on submission of document  under LC.

-It involve following parties:

1. Applicant or Importer or Buyer:

-On whose request LC is issued.

2. Issuing Bank or Opening Bank or Importers Bank:

-One who undertake to make payment on submission of document under LC.

3.Advising Bank :

- Through whom LC is advised to the exporter.

-It is not liable to payment.

-His duty is to check authenticity of LC.

4.Benificiary or Exporter or Seller:

-To whom the payment will be made.

5.Confirming Bank:

-Who  give additional undertaking to make payment in additon to undertaking to issuing bank. 

6. Nominated or Negotiating Bank:

-Who will purchase or discount export bill drawn under LC.