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Q.

What is letter of credit 90days (dp basis) and how it works ????

Tags: days, it, letter of credit
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Answers (1)

1.

A Letter of Credit a letter issued by the banker of the buyer, at the latter's request, in favour of the seller (exporter) informing him that the issuing banker undertakes to accept the bills drawn in respect of exports made to the buyer specified therein. It is a written promise of a bank, on behalf of a buyer, to pay a seller, provided the seller complies with the terms and conditions set forth in it. It is thus, a written intimation from the banker issuing it, that they have been instructed to open a credit for a certain amount of goods to be exported under certain terms and conditions. Banks act as intermediaries to collect payment from the buyer in exchange for the transfer of documents that enable the holder to take possession of the goods.
Letter of Credit provides a level of protection and security to both buyers and sellers engaged in international trade. The buyer is assured that payment will be released to the seller only after the bank has received the title documents call ...more
Answered by akhtar masood, 06 Jan '08 02:30 pm

 
  
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