Letter of Credit
This query is : Resolved
Gaurav Agarwal
(Querist)
22 October 2010
Is letter of credit used in service industry?
If yes, how?
If yes, how?
CMA Ramesh Krishnan
(Expert)
22 October 2010
My view, we cannot open LC against Service
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.
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
(Expert)
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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