Letter of credit

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nupur

nupur (Querist)
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29 November 2013 what is letter of credit.explain in detail

Nikhil Kaushik

Nikhil Kaushik (Expert)
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29 November 2013 Letters of credit are often used in international transactions to ensure that payment will be received. Due to the nature of international dealings including factors such as distance, differing laws in each country and difficulty in knowing each party personally, the use of letters of credit has become a very important aspect of international trade. The bank also acts on behalf of the buyer (holder of letter of credit) by ensuring that the supplier will not be paid until the bank receives a confirmation that the goods have been shipped.

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