Letter of credit -seller procedure

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I being a seller of goods, my buyer agrees to make payment throught 60 DAYS LC. Should I have LC facility in my bank to receive my payment through LC in my account. Also for LC discounting what is the madatory elegibility or requirements in the bank.

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As a seller, having a Letter of Credit (LC) facility with your bank can provide a secure way to receive payment from your buyer. Since your buyer has agreed to make payment through a 60-day LC, you'll need to ensure your bank can facilitate this process. Benefits of LC Facility Having an LC facility with your bank offers several benefits, including: - *Reduced Risk*: The LC guarantees payment from the buyer's bank, minimizing the risk of non-payment. - *Improved Cash Flow*: With the LC facility, you can receive payment promptly, improving your cash flow. - *Enhanced Credibility*: Having an LC facility demonstrates your credibility and financial stability to potential buyers. Mandatory Eligibility or Requirements for LC Discounting For LC discounting, the following are typically required: - *Valid LC*: A valid LC issued by the buyer's bank, confirming payment terms and conditions. - *Compliant Documents*: Presentation of compliant documents, such as shipping records or delivery evidence, to the advising bank or issuing bank. - *Creditworthiness*: The seller's creditworthiness and ability to fulfill the terms of the LC are assessed by the bank. - *Bank Account*: A valid bank account in the seller's name to receive the payment. LC Discounting Process The LC discounting process involves the following steps: 1. *LC Issuance*: The buyer's bank issues the LC, guaranteeing payment to the seller. 2. *Document Presentation*: The seller presents compliant documents to the advising bank or issuing bank. 3. *Verification*: The bank verifies the documents and confirms payment. 4. *Discounting*: The seller can opt for LC discounting, where the bank provides immediate payment, deducting a discounting fee. Consult with your bank to understand their specific requirements and process for LC facility and discounting.¹


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