Letter Of Credit

A Letter of Credit (L/C) is a financial document issued by a bank on behalf of an importer, guaranteeing that the exporter will receive payment for goods shipped, provided that the terms and conditions outlined in the L/C are met. This instrument is widely used in international trade to protect both buyers and sellers. For exporters, it ensures secure payment once the required shipping documents, such as the bill of lading, invoice, and packing list, are presented. For importers, it ensures that payment is only made when the goods are shipped according to the contract terms. The L/C reduces risks, facilitates trust between trading partners, and ensures smooth cross-border transactions.

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