Red Clause and Green Clause Letter of Credit Posted on 02 May 2018 Category : Import Red Clause and Green Clause Letter of Credit A red clause letter of credit is one that authorizes the exporter to avail pre-shipment finance on the strength of the credit. In this letter of credit, the clause is printed or typed in red ink. Hence, such letter of credit is known as red clause letter of credit. This is a pre-shipment finance provided to the beneficiary by the importer. This credit is liquidated once the documents are negotiated. In a green clause letter of credit, in addition to pre-shipment finance, storage facilities are allowed at the port of shipment to the exporter by opening bank. Such type of clause is typed or printed in green ink. So, this letter of credit is known as "green clause letter of credit'. Who can inspect import cargo in US Who decides shipping carrier on FOB shipments Who gets benefits from this website? Who is a ‘Manufacturer’ of excisable goods Who is a prime banker to check authenticity of letter of credit? Who is Stevedores Who receives the amount of auctioned / resold imported unclaimed/un-cleared goods? Why demurrage/detention waiver period is required at destination for import Transferability of Bill of Lading Why do carriers balance weight and volume while charging freight amount in Exports? How does CENVAT Credit work? Why, best attention while preparing Export Invoice? Is Letter of Credit LC safe for an Importer? Is ON BOARD CERTIFICATE required for LC negotiation What is said to contain in Bill of Lading. Why does Palletization require? Why labeling and marking in Export business? Would multiple registration be allowed under Goods and Service Tax (GSTIN)? Procedure for obtaining Registration number of GSTIN Procedures to get GST Registration number for IT exempted proprietorship firms. Comments John Keevan-Lynch: On 30 March 2017 Can an Indian bank issue a red clause letters of credit? I have been told it is against Indian banking regulations. Please advise. Thank you.