Types of LC

Types of LC

Following  are  types of LC

1. Revocable LC

2. Irrevocable LC

3.Transferable LC
4.Red Clause LC
5.Green Clause LC
6.Back to Back LC
7.Stand by LC
8.Restricted LC
9.DA LC (Document against acceptance)
10. DP LC(Document against Payment)
11. Revolving LC

1. Revocable :

-Which can be amended or cancel without consent of beneficiary.

2. Irrevocable:

-Which can't be amended or cancel without consent of beneficiary.

-If nothing is written, it will be irrevocable.

-Under UCPDC only irrevocable LC is issued.

3.Transferable LC:

-Which can be transferred from one beneficiary to another.

-LC can be transferred only once but can be transfer to more than one beneficiary.

-LC is transferable only if it is specifically mansion.

4.Red Clause LC:

-Which content a clause to provide finance to exporter for manufacturing the goods made for export at the risk of issuing bank.

5.Green Clause LC:

-It is extension of Red Clause LC.

-Contain a clause to provide finance for storage also in addition to finance  of manufacturing of goods.

6.Back to Back LC:

-Which is issued on strength of another LC.

7.Stand by LC:

-It is just like bank Guarantee.

8.Restricted LC:

-In which Negotiation,Purchase or discount of export bill is restricted to a particular bank.

9.DA LC (Document against acceptance):

-In which document will deliver against acceptance and payment will be made after same time.

10. DP LC(Document against Payment):

-Document will deliver only against payment.

11. Revolving LC:

-Which become available again on negotiation of document under LC.

-There will be restriction on no. of times it can revolve  or maximum amount which can be negotiated or both.