This document summarizes different types of letters of credit used in international trade. It discusses irrevocable and revocable letters of credit, standby letters of credit, revolving letters of credit, and back-to-back letters of credit. It also mentions terms like red clause letters of credit, green clause letters of credit, crystalization of sight bills under import letters of credit, and OGL (Open General License) items. Uniform Rules for Bank to Bank Reimbursements (URR) and INCOTERMS, international rules for trade term interpretation, are also briefly covered.
This document summarizes different types of letters of credit used in international trade. It discusses irrevocable and revocable letters of credit, standby letters of credit, revolving letters of credit, and back-to-back letters of credit. It also mentions terms like red clause letters of credit, green clause letters of credit, crystalization of sight bills under import letters of credit, and OGL (Open General License) items. Uniform Rules for Bank to Bank Reimbursements (URR) and INCOTERMS, international rules for trade term interpretation, are also briefly covered.
This document summarizes different types of letters of credit used in international trade. It discusses irrevocable and revocable letters of credit, standby letters of credit, revolving letters of credit, and back-to-back letters of credit. It also mentions terms like red clause letters of credit, green clause letters of credit, crystalization of sight bills under import letters of credit, and OGL (Open General License) items. Uniform Rules for Bank to Bank Reimbursements (URR) and INCOTERMS, international rules for trade term interpretation, are also briefly covered.
L.C (Letter of Credit) is an undertaking by a bank , on behalf of the buyer(importer), to the
beneficiary(seller) of the credit that it would honour bills drawn in terms of the credit. Irrevocable Letter of Credit: Cant be amended or cancelled by the opening bank without the consent of all the concerned parties. Revocable Letter of credit: Can be revoked at any time by the opening bank without the consent of the parties. Standby Letter of Credit: One bank advises another bank to pay only if a transaction agreed to by the opener of the credit with the beneficiary is not performed. Revolving Letter of Credit: On payment of bill the LC shall be reinstated by the value of the bill negotiated but within the original value of the LC and before its validity. The validity of such LCs should not be more than one year. Red Clause Letter of credit: When the opening bank requests the advising bank to give loan to the exporter for the purpose of export. Green Clause Letter of Credit: When the Red Clause credit provides for the grant of storage facilities at the port of shipment. Back to Back Letter of Credit: When an inland L/C is backed by the Foreign Letter of Credit for supply of goods by the manufacturer to the exporter for onward exporting the goods to foreign contry. Demand/sight bill under import LC shall be crystalised if not retired by the customer on the 10th day from the date of receipt thereof by converting the foreign currency amount in to rupees at the Banks Bill selling rate. (Crystalisation) OGL(Open General License) refers to the list of items mentioned in the foreign trade policy which can be imported freely.
URR -525 UNIFORM RULES FOR BANK TO BANK REIMBURSEMENTS
INFOTERMS : ICC published a set of international rules for the interpretation of trade terms known as INCOTERMS
There are 39 articles in the UCP 600, as compared to 49 in the earlier version .
DOCDEX has been set up for settling differences among banks in the interpretation of the code.
A Short View of the Laws Now Subsisting with Respect to the Powers of the East India Company
To Borrow Money under their Seal, and to Incur Debts in
the Course of their Trade, by the Purchase of Goods on
Credit, and by Freighting Ships or other Mercantile
Transactions