லெட்டர் ஆப் கிரெடிட் வகைகள்

லெட்டர் ஆப் கிரெடிட் வகைகள்

VARIOUS TYPE OF LETTER OF CREDIT

Revocable Credit
This can be amended or cancelled at any time by the importer without the consent of the exporter. This option is not often used, as there is little protection for the exporter. By default all credits are irrevocable, unless otherwise stated.
Irrevocable Credit
Once issued this can only be changed or cancelled with the consent of all the parties. The seller must merely comply with the terms and conditions of the credit in order to receive payment.
Confirmed Credit
In some instances, exporters may request a credit to be confirmed by another bank, (usually a bank in their own country). If a bank adds its confirmation to a credit, it means that it is obliged to pay if the terms and conditions of the credit are complied with. This obligation to pay exists even if the issuing bank or country defaults.
Payment Credit
This is available for payment at the tellers of the paying bank, as nominated in the credit. The seller can, therefore, present documents to the paying bank and does not have to wait for the documents to be forwarded to the issuing bank for checking and subsequent payment.
Negotiation Credit
This is always payable at the counters of the issuing bank. Buyers can use negotiation credits to delay payment until the documents have been received and checked by the issuing bank.
Deferred Payment Credit
Similar to payment credits, except that they are payable at a future date.
Acceptance Credit
The accepting bank guarantees payment to the holder of the bill of exchange on maturity date - regardless of whether the credit is confirmed or not. This option comes with an acceptance fee which can be substantial.
Back-to-Back Credit
The original letter of credit is used as security to open another credit in favour of the exporter's own supplier. The bank confirming the original credit may not necessarily be the issuing bank of the second credit.
Transferable Credit
This is normally used when the exporter is not supplying the goods and wishes to transfer all or part of the responsibilities under the credit to the supplier(s).
Red Clause Credit
This enables the exporter to obtain advance payment before shipment. This is provided against the exporter's certificate confirming its undertaking to ship the goods and to present the documents in compliance with the terms and conditions of the documentary credit.
Green Clause Credit
Similar to a Red Clause Credit, but in addition to pre-shipment finance the exporter also receives storage facilities at the port of shipment at the expense of the buyer.
Packing Credit
This offers pre-shipment finance to the seller against warehouse receipts, forwarding agent's receipts or similar documents that prove the goods are no longer in the seller's possession.
Standby Credit
Similar to a normal letter of credit, this method differs in that it is a default instrument, whereas a normal credit is a payment instrument. A standby credit is only called upon in the event of failure to perform. Its function is, therefore, that of a guarantee.
Revolving Credit
This allows for the credit to be automatically reinstated under certain circumstances. It is normally used where shipments of the same goods are made to the same importer.

லெட்டர் ஆப் கிரெடிட்

லெட்டர் ஆப் கிரெடிட் - பற்றி வலையில் நிறைய பேர் விளக்கம் கேட்டிருந்தார்கள். (வலையில் உலாவும்போது பார்த்தது)
இந்த விளக்கம் நிச்சயமாக பயனுள்ளதாக இருக்கும் என்று நினைக்கின்றேன்.
பயனுள்ள விளக்கங்கள் தேவையெனில் தயவு செய்து தயக்கமின்றி தொடர்பு கொள்ளுங்கள்.

The bank will issue a letter of credit in favour of the seller to assure the payment for the cost of goods sold.

If the seller delivers the goods to the buyer and acts in accordance with the conditions agreed upon by both the buyer and the seller as specified in such a letter of credit, the bank makes payment according to the letter of credit.

The issuance of a domestic letter of credit helps facilitate business conduct between the buyer and the seller and ensues safety in transacting goods between the two parties.

The bank issues a letter of guarantee to its client by making a promise to the recipient (receiver) a guarantee that if the client acts in compliance with the terms and conditions as agreed upon in the letter of guarantee.

This prevents damage to the receiver of the letter of guarantee and if the client fails to make payment, the bank will make payment to the amount specified in the letter of guarantee. eg, guarantee of bidding tender, guarantee of construction contract, guarantee of payment for electricity, etc. The method of issuing a letter of guarantee helps the client & avoids cash as a guarantee.It also acts as a safeguard between both parties.

The buyer and seller agree terms, including means of transport, period of credit offered, latest date of shipment and the relevant Inco-term to be used.

The buyer applies to the bank for a letter of credit to be issued.

The bank will then evaluate the buyer's credit rating, and may require cash cover and/or reduction of other lending limits.

The issuing bank will issue a letter of credit. This will be sent to the advising bank by airmail, telex or SWIFT.

The advising bank will establish authenticity of the letter of credit using signature books or test codes, then informs seller (beneficiary).

The advising bank may confirm the letter of credit, i.e. add its own payment undertaking.

The seller should check that the letter of credit matches the commercial agreement, and that the terms and conditions can be satisfied in goodtime.

If there is anything that may cause a problem, an amendment should be requested.

The seller ships the goods and gathers together all the documents asked for in the letter of credit including the invoice, bill of lading, insurance policy certificate, as well as the certificates of origin and quality.

Before presenting the documents to the bank, the seller should check them for discrepancies against the letter of credit, and correct the documents where necessary.

The documents are presented to one of the banks, usually the advising bank.

The advising bank checks the documents against the letter of credit. If the documents are compliant, the bank pays the seller and forwards the documents to the issuing bank.

The issuing bank will also check the documents. If they are in order the issuing bank will reimburse the seller's bank immediately.

The issuing bank debits the buyer and releases the documents (including transport document), so that the buyer can claim the goods from the carrier.

It should be noted that the letter of credit refers to documents representing the goods, and not the physical goods themselves. The banks do not examine the goods on behalf of their customers but instead only care about the documents representing the goods.