Namaste,
what do you mean by letter of credit issued by bankers?
Menu
letter of credit
Replies (5)
Hi,
Letter of Guarantee is an assurance from the banker to the payee to pay to him on behalf of the applicant.
Ex:
Payee - Supplier of Goods
Applicant - Buyer of Goods
Bank assures the seller on behalf of the buyer of the goods/services. It is nothing but a credit assurance to the seller.
So, In case the buyer is unable to pay the amount then the LC issued bank needs to honour the payment.
Hope ths helps
in this case payment will be made by bank or buyer to the seller
Bank makes the payment on behalf of the buyer...
Bank will then debit the amount from the buyers account..
However, bank take into account of the credit worthiness of the buyer before granting LOC
Thank you very much.
Youre welcome Vishnu.
Recent Topics :
- Rule 86(B) Applicability
- ROC FILINGS FY2025-26
- Mismatch in 26AS
- How Can a Trader Utilise Approximately ₹1.20
- How Can Law Students Present Papers at Conferences
- On which amount 200% penalty under section 270A is
- RECEIVED INTIMATION U/S 399 FOR TDS PAYMENT ON PRO
- How do CA firms track SEBI/AMFI circulars and dead
- Jurisdictional validity of Sec 148 notice after fa
- Taxable Income or Not
Related Topics :
CAclubindia
