What is LC Letter of Credit in export import business

What is LC Letter of Credit in export import business copy

 

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


Letter of credit is an assurance given by the buyer’s bank to remit the amount to the seller through seller’s bank on maturity, as per the terms and conditions of document based on the contractual agreement between buyer and seller. Now in simple words, If LC opened on your name, you will receive amount though the buyer’s bank on the agreed time. All Letter of Credits for export import trade is handled under the guidelines of Uniform Customs and Practice of Documentary Credit of International Chamber of Commerce (UCP 600).

There are various types of letters of credits like Revocable, Irrevocable, Confirmed, Unconfirmed, Clean & Documentary, Fixed, Revolving, Transferable, Back to Back etc. Most common and safe LC is Irrevocable Letter of Credit. I will explain in details about all types of LC in another article.

 

You can also read more information by clicking    What are the advantages of Letter of Credit to Exporter? How LC is benefited to Importer?   Are there any disadvantages to importer for a consignment under Letter of Credit?   What are the disadvantages of LC to an exporter?   Who are the parties involved in Letter of Credit?   How to check authenticity of LC? What is Prime Banker?  Yes, I am sure, once after going through that articles you will have a good knowledge about Letter of Credit.

 

 

 


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


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Comments


mahesh: IT'S GREAT TO LEARN MORE AND MORE ABOUT FOR SHIPPING

omoyiwola: I need contract for Charcoal or wood timber

Harigokul: HI sir, you said that there are various types of letters of credits like Revocable, Irrevocable, Confirmed, Unconfirmed, Clean & Documentary, Fixed, Revolving, Transferable, Back to Back etc. could you explain?????

rana imran : i want expoter of bed sheet in fsd pakistan

Sivakumar : Hi sir, I want to know 2 answers from you. 1) what is the difference between export lc and import lc. 2) what is the difference between inward bills collections and outward bills collections. Kindly clarify, I will appreciate if you clarify this. Thank you, Regards, Sivakumar D

sv anand : I work with a company in Dubai as an Accountant in Lower level. I have been given some challenging work to handle L/c. The basic points I am aware but some time I face some twisting condition which is out of my reach. Recently I had a Export L/c which says under Additional Condition as

inder jeeth : I AM INDERJEETH ,I HAVE A QUESTION I WANT TO INTERMEDIATE BETWEEN THE EXPORTER AND IMPORTER IN SUCH A WAY THAT THEY DONT KNOW EACH OTHER I VE BEEN ADVICED THIS WAY FOR WHICH I HAVE PLANNED TO OPEN AN OFFICE IN DUBAI (OFF SHORE ) 1. THE EXPORTER MAKES THE BL ON THE DUBAI COMPANY 2. AND SURRENDERS THE BL. CAN THIS HAPPEN THE SAME DAY THE EXPORTER RECEIVES THE BL. 3. SENDS THE SURRENDERED BL MESSAGE TO ME 4. I IN TURN SEND IT TO A SHIPPING AGENT TO MAKE A NEW BL IN THE NAME OF THE BUYER 5. NOW CAN THE AGENT SEND THE NEW BL TO MY BANK IN DUBAI DIRECTLY , WITH OUT SENDING IT TO ME 6. HOW MUCH TIME DOES IT TAKE THE AGENT TO MAKE THE NEW BL ( DOES IT HAPPEN IN FEW HOURS OR IT TAKES A DAY.. DOES THE AGENT NEED TO GO TO THE SHIPPING COMPANY S OFFICE OR CAN BE DONE THROUGH THE NET. 7.WILL MY BANKER IN DUBAI( ONLY A CURRENT ACCOUNT ) ALLOW ME TO OPEN AN LC ON THE BASIS OF MY BUYERS LC.

Dharmendra Navar : I am also a new, young and result oriented person .Right now I am starting a new business, in which I am importing copper scrap from China and selling it to other countries. My seller's requirement is to pay 30% in advance and the balance 70% against the copy of BL. Can you please reply with following queries? Can I close the LC once the goods reaches at india port?When the buyer will get the balance 70% amount in this condition? How much security for me (importer)in this condition? Is it true that bill of lading is document when the shipment (container) starts it's journey from China to India? If I can close the LC once goods reaches at india port, but not checked by us, is it called the site LC? Please reply for the same

amar pote : I am a regular user of your site - How to Export and Import. I want to gain knowledge in the field of Inward Remittance. Can you help me to provide some important notes on Inward Remittance?

Ahammed Junais : I want to Study LC documentation of export and import courses, so can you help me.

Dots Collection : From Bagladesh. Need Export & Import LC regular Basis. If you can help about LC Please advise terms and condition Urgent basis.Awaiting your valuable reply.

baljeet: We are in urgent need of suggestion for below points:- This is regarding LCL shipment India to Saudi Arabia 1. Export L.C opened in SYndicate Bank 2. Material already shipped on 05.05.2017 3. We want to payment in another account of SBI Bank (NOT IN SYNDICATE) 4. AD code registerd at port - syndicate Bank.

baljeet : We, JSSI Hydraulics Pvt. Ltd. located at New Delhi and doing export from last 4 Years. We are in urgent need of suggestion for below points:- This is regarding LCL shipment India to Saudi Arabia 1. Export L.C opened in SYndicate Bank 2. Material already shipped on 05.05.2017 3. We want to payment in another account of SBI Bank (NOT IN SYNDICATE) 4. AD code registerd at port - syndicate Bank.

Arun: I need your assistance regarding preshipment loan against irrevocable LC. we received the export order from our client . Client also ready to give irrevocable LC but we need some amount to purchase the goods . we are very new to the export and don't have vintage so bank is not ready to give preshipment loan. Bank told we dont have such option like preshipment loan. with LC cant we arrange money for business ? Any procedure please let me know.

V.BASKAR: Sir do you arrange any one day training program for export , please do inform.

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