How does Bill of Lading work in Sight LC
Thursday, October 27, 2016     Category : Bill of Lading

The information provided here is part of Guide on howtoexport and import 

How does Bill of Lading work in Sight LC


How does Bill of Lading work in Sight LC


How does Bill of Lading function in Sight Letter of Credit?


In this article let us discuss about the mechanism of Bill of Lading under Sight LC.  How does Bill of Lading work under sight LC? How does bank handle Bill of Lading under LC at sight?

Letter of credit at sight is one of the payment terms in international trade.  Once after completion of export formalities at customs, exporter  collects original Bill of Lading from carrier of goods.  The said original bill of lading along with other shipping documents   are submitted along with Letter of Credit  with his bank for negotiation.  After satisfying with the terms and conditions of letter of credit, the authorized bank negotiate documents and sends  the documents to overseas buyers bank.  The buyer’s bank notifies  buyer  and instructs him to accept documents.   The buyer accepts documents and  arrange for import customs clearance to take delivery of goods.  He surrenders original bill of lading with the carrier and takes delivery of goods.


Here the point is, without original bill of lading, the buyer can not take delivery of goods.  As per sight LC conditions, LC opening bank has to remit amount of shipment to beneficiary bank,  on acceptance of documents by buyer.  So,  buyers bank (LC opening bank) delivers original bill of lading only after receiving  the export proceeds (value of  goods shipped).  In short, without remitting the amount as per letter of credit, the buyer can not take delivery of goods.

As per agreed terms with supplier, if buyer agreed to mention  opening bank’s name  as consignee or ‘To Order’,  the  opening bank (buyer’s bank)  has to issue a ‘Delivery order ‘  to the buyer.    The carrier of goods  can release cargo  to the buyer only after receiving such delivery order  issued by the bank mentioned on Bill of Lading.  Before issuing delivery order, bank confirms  receipts  of payment  from  his customer (buyer) against  the Letter of Credit.  Also read  Can Original Bill of lading be surrendered under LC at sight   Is Airway bill a documents of title to us under LC at sight?


In this article I have explained about the importance of Bill of Lading under LC at sight.  Have you satisfied with this article about the mechanism of Bill of Lading under sight Letter of Credit?  What is your experience in handling Letter of Credit at Sight?  Would you like to share your knowledge and experience to add this article?  Share below your thoughts about the function of Bill of Lading under Letter of Credit at sight.


Comment below your thoughts about this article - How does bill of lading work under sight Letter of Credit?



The above information is a part of Online export import training guide 


STALE BILL OF LADING What does it mean?   Difference between Clean On Board Bill of Lading and Shipped On Board Bill of Lading.   Can Original Bill of lading be surrendered under DP terms of payment  Can Original Bill of lading be surrendered under LC at sight   Can Bill of Lading be surrendered on LC terms   How to obtain a duplicate BL, if original bill of lading lost?  Can a Bill of Lading be consigned to a customs broker?   Can I get bill of lading before loading cargo   Can two consignments meant for one buyer be shipped together under one Bill of Lading?    Consignee To Order in Bill of Lading    How to avoid delay in receiving OBL Original Bill of Lading?   Amendment of Bill of Lading    How to amend shipper details in Bill of Lading?.   How to surrender HBL House Bill of Lading   Surrender of Bill of Lading Some facts How does Bill of Lading work in Sight LC.   How does Bill of Lading work in DP payment terms?   Can a Bill of Lading (BL) be predated for LC negotiation?   What is the earliest date can be mentioned on Bill of Lading. Can BL date and let export date be same day?   Can shipping line predate Bill of Lading,What is the earliest date can be mentioned on Bill of Lading.    What is Said to weigh in Bill of Lading   What is Shipper Load, stow and count in Bill of Lading    What is said to contain in Bill of Lading.   Can an importer take delivery of goods without original bill of lading?  What is House BL House Bill of Lading   Can Bill of Lading (BL) be before date of Certificate of origin GSP?   What is Express Release Bill of Lading?  Can Bill of Lading be surrendered at port of loading?    Transferability of Bill of Lading  What is charter party bill of lading ?   How  transshipment bill of lading works?   What is Combined Bill of Lading / Multi model Bill of Lading   Unclean Bill of Lading/Claused bill of lading/foul bill of lading/Dirty Bill of Lading   What is Clean on board Bill of Lading?  Is received for shipment Bill of Lading sufficient for LC negotiation?  Different types of Bill of Lading   3 Reasons under Importance of bill of lading in international trade   When can an exporter get bill of lading from shipping company?   

Other posts about Import Export online tutorial

The legal strength of Bill of Exchange in International Trade. What is Bill of Exchange in International Trade.
What is the earliest date can be mentioned on Bill of Lading. Can BL date and let export date be same day?
How to amend BL number in Import General Manifest (IGM)
Disadvantages of Letter of credit (LC) for Exporter
Who are the parties involved in an LC Letter of Credit
How to start Export Business?
How to get Export Orders?
What are the risks and solutions in Export Business?
Click here to know India Trade Classification(ITC)
Service Tax - Click here to read complete notification under Budget 2014
What is Bank post shipment credit to exporters?
Types of export containers
Measurement of export containers
Export Import Policy of India 2015-20
MEIS, Merchandise Exports from India Scheme
SEIS, Service Exports from India Scheme
Merge your Commercial Invoice and Packing List for all your future exports
Export procedures and documentation


wafaa Says :
Friday, August 22, 2014
Thank you
Saturday, April 11, 2015
Dear Sir, Thank you sharing article. It very useful to me. My name is sanjay from India. I want to send export spices from south africa to Egypt. My supplier is agreed to send the material FOB at egypt port. My customer payment term is 100% LC At sight. I am totally confused about what are the instructions should I give to my supplier. And what are the documents are required to him forward the same to my egypt customer. Please help in this matter. Regards SANJAY LOHAR
Harsh Fatnani Says :
Wednesday, October 14, 2015
I got your contact address from I am absolutey layman in respect of import procedures and request you to kindly update me in following respect. I am working as finance executive in Goverment Hospital and we need to Import Medical equipment from foreign country whether we will have to open LC to make payment. Whether we will be eligible for custom duty exemption when we make payment to foreign vendor in its currency. Few vendors in india also ready to provide us equipment but they are saying that in case the payment will be made in indian currency, we will not be eligible for Custom duty exemption.
Juria Spend Says :
Tuesday, March 01, 2016
If L/C at the description of goods stipulates value of goods, is it compulsory that we have to show this value on the B/L?
moez Says :
Thursday, June 09, 2016
Your english is horrible, can't follow
dineah parihar Says :
Wednesday, August 10, 2016
First of all, thank you making such an informative web site. We have received LC @ sight from Yemen in which Yemen's local bank, issuing bank, name is inserted in place of importer as an Applicant.Can it be possible?
Anand Sonawane Says :
Saturday, August 13, 2016
My name is Anand and I wanted to start my own export. I want to know about letter of credit. Is it mandatory for export business or are there any other ways to get export payment? If I'm often doing business with a genuine buyer, will there be LC required or I can go for some other mode of payment? How many modes of payment in export import?
Nelson Rodriguez Says :
Wednesday, August 17, 2016
I've enjoyed reading your export/import blog. It has alot of great information. I have a question: What does it mean when a BOL is stamped "surrendered"? Does this make the BOL non-negotiable?

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