A Letter of Credit (LC) is a bank-issued guarantee of payment to a seller, ensuring they are paid for goods or services once specific conditions are met. It is commonly used in international trade to reduce risk. There are various types of LCs, including revocable, irrevocable, sight, and standby LCs.

In an LC transaction:

The buyer requests an LC from their bank.

The seller ships the goods and submits required documents to the bank.

If the documents match the LC terms, the bank makes payment to the seller.

The buyer reimburses the bank.

This service helps ensure secure, reliable transactions between parties in different countries.

https://www.chandracredit.com/letter-of-credit

https://letterofcreditonline.com/

https://www.chandracredit.com/blog-details/76/know-about-irrevocable-letter-of-credit-2024