What is Inland letter of credit?
Inland Letter of Credit is issued to meet out the credit requirement for domestic trade. This is a form of no fund based credit extended by the banks. This is given to he seller of the goods on behalf of the buyer by the bank where the buyer deals. It offers the comfort of obligation from the banker to the issue of the Inland letter of credit that they undertake to make good of the loss. If any in the case of non payment of the amount as accepted by the buyer. As such the seller of the goods can take finance by tendering the bills along with the ILC to his banker before the proceeds are realized.
