What is Master LC?
When a L/C is opened to import goods directly from the exporter is called master L/C. Master L/C is issued by the buyer (Buyer’s bank) to manufacturer. Master L/C has higher financial value than back to back L/C. It is used in international trade between buyers and sellers of different countries.
What does L/C mean in banking?
A letter of credit is a document sent from a bank or financial institute that guarantees that a seller will receive a buyer’s payment on time and for the full amount. Letters of credit are often used within the international trade industry.
What is Master LC in Bangladesh?
Definition. Master LC is prepared by the importer/buyer to import goods from the manufacturer. Back to back LC is opened by the exporter/manufacturer to procure Raw materials for the production of exported goods. Issuing Bank. Master LC is issued by the Importer’s Bank.
What is LC in textile?
LC (Letter of Credit) is the familiar word in apparel industry. L/C set up is the work of merchandising section in garment factory. A merchandiser should have clear concept on letter of credit. Letter of Credit (L/C) also known as Documentary Credit .
What is LC limit?
More Definitions of LC Limit LC Limit means, with respect to any Issuing Bank at any time, an amount equal to the quotient of $50,000,000 divided by the total number of Issuing Banks at such time.
What is confirmed LC?
A confirmed LC is a Bank Credit Letter where the payment guarantee of the seller or exporter is backed up by a second bank or a confirming bank. The borrowers are required to apply for the confirmed LC if the seller is not convinced about the creditworthiness of the issuing bank of the original letter.
What means L C?
letter of credit
written abbreviation for letter of credit : We have opened an L/C for your use with the second contract.
How does LC sight work?
When a bank issues a sight LC, it acts as a guarantor of payment to the beneficiary. The seller has to furnish all the shipping documents mentioned under the terms and conditions in the LC to receive the payment. Once you submit all the documents and the issuing bank verifies the same, the bank releases the funds.
What is transfer LC?
What is a Transferable LC? A Transferable Letter of Credit (LC) is a documentary credit under which the Beneficiary (first Beneficiary) may request the bank specifically authorised in the credit to transfer the credit, available in whole or part, to one or more secondary Beneficiary(ies).
What is back to back LC in garments?
In a back-to-back LC, an importer issues an LC to an exporter and the exporter can use it as collateral to get another LC issued for sourcing raw materials and accessories on credit.
What are the different types of LC?
Main types of LC
- Irrevocable LC. This LC cannot be cancelled or modified without consent of the beneficiary (Seller).
- Revocable LC.
- Stand-by LC.
- Confirmed LC.
- Unconfirmed LC.
- Transferable LC.
- Back-to-Back LC.
- Payment at Sight LC.