WHAT TYPES OF LC (LETTERS OF CREDIT) ARE THERE?
Revocable Letter of Credit Just like the name says the LC can be revoked by the Issuing Bank without the agreement of the beneficiary. Irrevocable Letter of Credit Can not be cancelled or amended without all the parties agreement. Standby Letter of Credit Guarantee of payment. If the beneficiary does not get paid from its customer it can then demand payment from the Bank by forwarding the copy of the invoice that was not paid and supporting documentation. Revolving Letter of Credit It is established when there are regular shipments of the same commodity between supplier and customer. Eliminates the need to issue an LC for each individual transaction THIS SOUNDS COMPLEX. PLEASE SIMPLIFY YOUR EXPLANATION OF LCs The LC process simplified: 1) The Buyer issues the LOI (letter of intent) and via the bank the bank issues comfort letter (BCL) 2) Buyer and seller agree to terms including means of transport,and latest date of shipment acceptable. 3) Seller issues FCO. (Full Corporate offer Contr
