■ How Does the Letter of Credit Process Work?
■ Product Feature
■ Irrevocable versus Revocable Letters of Credit
■ Confirmed Irrevocable versus
Unconfirmed Irrevocable Letters of Credit
■ Restricted Negotiable versus
Freely Negotiable Letters of Credit
■ Revolving Letter of Credit
A letter of credit is an undertaking of the issuing bank (and in the case of a confirmed Letter of Credit, the confirming bank) to pay, accept or negotiate a bill of exchange up to the extent of credit amount within the L/C validity and against stipulated documents. The two basic forms of Letters of Credit are revocable and irrevocable. Depending on the payment conditions the Letter of Credit may be Sight, Time or Conditional. The purpose of the LC is to provide the facility for NCB customers to meet their import/export obligations to overseas and/or local suppliers and buyers. A letter of credit is established at the request of the applicant to fulfill the agreement between the buyer (the applicant) and the seller (the beneficiary) for the supply of merchandise or to provide services against some specific documents to be routed through Banks.