What (who) is letter of credit - definition
DOCUMENT ISSUED BY A FINANCIAL INSTITUTION
Letters of credit; Letter of Credit; Documentary credit; L/C; Standby letter of credit; Commercial letter of credit; Guaranteed letter of credit; Open letter of credit; Back-to-back letter of credit; SBLC; Documentary credits; Cash against documents; Cash against Documents; Letters of Credit; User:Ishanp95/sandbox; Letter of undertaking; Draft:Letter of undertaking
letter of credit
1.
A letter of credit is a letter written by a bank authorizing another bank of pay someone a sum of money. Letters of credit are often used by importers and exporters. (BUSINESS)
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2.
A letter of credit is a written promise from a bank stating that they will repay bonds to lenders if the borrowers is unable to pay them. (BUSINESS)
The project is being backed by a letter of credit from Lasalle Bank.
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Letter of Credit
I. An instrument of audit issued by the buyer's bank, at the buyer's request, in which the issuing bank promises to pay the seller upon presentation of documents stipulated in the terms and conditions of the audit
II. A financial document issued by a bank at the request of the consignee guaranteeing payment to the shipper for cargo if certain terms and conditions are fulfilled. Normally it contains a brief description of the goods, documents required, a shipping date, and an expiration date after which payment will no longer be made.- An Irrevocable Letter of Credit is one which obligates the issuing bank to pay the exporter when all terms and conditions of the letter of credit have been met. None of the terms and conditions may be changed without the consent of all parties to the letter of credit.- A Revocable Letter of Credit is subject to possible recall or amendment at the option of the applicant, without the approval of the beneficiary.- A Confirmed Letter of Credit is issued by a foreign bank with its validity confirmed by a U.S. bank. An exporter who requires a confirmed letter of credit from the buyer is assured payment from the U.S. bank in case the foreign buyer or bank defaults.- A Documentary Letter of Credit is one for which the issuing bank stipulates that certain documents must accompany a draft. The documents assure the applicant (importer) that the merchandise has been shipped and that title to the goods has been transferred to the importer.
letter of credit
n. a document issued by a bank guaranteeing to provide a customer a line of credit (automatic loan up to a certain amount) for money or security for a loan. Such a letter is used primarily to facilitate long-distance business transactions.
Wikipedia
Letter of credit
A letter of credit (LC), also known as a documentary credit or bankers commercial credit, or letter of undertaking (LoU), is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods. Letters of credit are used extensively in the financing of international trade, when the reliability of contracting parties cannot be readily and easily determined. Its economic effect is to introduce a bank as an underwriter that assumes the counterparty risk of the buyer paying the seller for goods.
Pronunciation examples for letter of credit
1. And then you had to get a letter of credit.
The New Industrial Revolution _ Chris Anderson _ Talks at Google
Examples of use of letter of credit
1. One of the other investors, Bear Stearns Cos., tried to cash the Hong Kong firm‘s letter of credit.
2. According to the bill, each college will have to submit a letter of credit for 500,000 euros to state authorities before being granted an operating license.
3. Havana has to pay for the time that ships sit idle after loading while waiting for payment or pay a fee to use a letter of credit.
4. "Nanjing has paid a non–refundable deposit, and there will be a letter–of–credit payment in respect of the money.
5. If the contract is approved, the ministry must apply for a letter of credit through the Finance Ministry to obtain the cash to pay for the contract.