- Irrevocable LC
- Revocable LC
- Stand-by- LC
- Confirmed LC
- Unconfirmed LC
- Transferable LC
- Back-to-Back LC
- Payment at sight LC
- Deferred charge LC
- Red clause LC
Irrevocable LC
This LC cannot be cancelled or
modified without consent of the beneficiary (vendor). This LC reflects absolute
liability of the financial institution (provider) to the alternative
celebration.
Revocable LC
This kind of LC may be cancelled or modified via the financial
institution (company) on the consumer's instructions without earlier agreement
of the beneficiary (dealer). The financial institution will no longer have any
liabilities to the beneficiary after revocation of the LC.
Stand-by- LC
This LC is towards the financial institution guarantee
and gives more bendy collaboration opportunity to dealer and consumer. The bank
will credit the LC whilst the consumer fails to satisfy fee liabilities to
supplier.
Confirmed LC
Further to the bank guarantee of the LC provider, this
LC type is showed by means of the seller's bank or any other financial
institution. Irrespective to the price via the financial institution issuing
the LC (provider), the financial institution confirming the LC is accountable
for overall performance of duties.
Unconfirmed LC
Only the bank issuing the LC will be chargeable for
price of this LC.
Transferable LC
This LC allows the vendor to assign a part of the letter of credit to other parties. This lc is mainly beneficial in those cases when the seller isn't always a sole producer of the goods and purchases some elements from other events, because it gets rid of the necessity of commencing numerous LC.Back-to-Back LC
This LC type considers issuing the second LC on the
premise of the first letter of credit score. LC is opened in favor of intermediary
as in step with the purchaser's instructions and on the basis of this LC and
commands of the intermediary a brand new LC is opened in choose of seller of
the products.
Payment at sight LC
Consistent with this LC, charge is made to the seller right
now (maximum inside 7 days) after the specified documents have been submitted.
Deferred charge LC
In keeping with this LC the charge to the seller isn't always made when the files are submitted, but as a substitute at a later length described within the letter of credit. In most instances the price in choose of seller under this LC is made upon receipt of goods by the client.Red clause LC
The vendor can request boost for an agreed amount of
the LC earlier than shipment of goods and submittal of required documents. This
red clause is so termed due to the fact it is usually published in red on the
document to draw attention to "advance charge" time period of the
credit.
