Letter of Credit

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Gaurav Agarwal

Gaurav Agarwal (Querist)
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22 October 2010 Is letter of credit used in service industry?
If yes, how?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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22 October 2010 My view, we cannot open LC against Service

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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23 October 2010 Yes It can be opened for service also.

A commercial letter of credit is a contractual agreement between a bank, known as the issuing bank, on behalf of one of its customers, authorizing another bank, known as the advising or confirming bank, to make payment to the beneficiary. The issuing bank, on the request of its customer, opens the letter of credit. The issuing bank makes a commitment to honor drawings made under the credit. The beneficiary is normally the provider of goods and/or services. Essentially, the issuing bank replaces the bank's customer as the payee.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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01 November 2010 Dear Mr.Shailesh, we are tried for last 3 years, but we unable to get open the LC against Service

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