Credit Letters and Reply

Meeran Nabi Khan

Abdus Samad Khawaja
Credit Letter
• A letter requesting to loan object of monetary is known
as letter of credit
• It is written to favor business facilities and financial
assistance
Credit Letter
• Due to mutual relation, such a letter is
communicated between sender receiver who are
found to be business or personal friends
Key Aspects
• Buy now and pay later is a common practice of
the business world
• The writer should be able to convince the
addressee that he will be honest
Key Aspects
• There should be no confusion regarding the terms
of credit facility
• Business on large scale is almost impossible
without credit facility
• It helps the wholesale dealers and retailers to
obtain a product without making payment in
advance
Types Of Audience
Ordinary letter of credit: Such a letter is
addressed to single person or organization

Circular letter of credit: Such a letter is

addressed to various person or organizations
Types of letter
• Request for Credit: An individual is asking for
credit from an Organization or a person

• Request for Credit as a Guarantor: An

organization requesting credit for an individual
from another organization or a person
Content Involved
• Receiver’s name and address
• Bearer’s name, address and complete
identification
• Bearer’s attested specimen signature
• Objective of letter of credit
Content Involved
• Request for providing financial/help.
• Proper documentation of the money receipt and
forwarding of such as an evidence.
• Reimbursement system of the paid amount.
• Duration of the letter of credit
• Security and cautiousness.
• Assurance for similar future assistance.
Request for Credit Example
Globe Computer Solutions
R-6, Sector – 26
Noida , U.P. 201205
0120-2635672
gc_solution@gmail.com
November 24, 2009

Mr. T. Ramarao
The Sales Manager
HCL Technologies Ltd.
B-45, Sector – 62
Noida, U.P. 201207
0120-2638975
hcl_tech@gmail.com

Dear Sir,

Enclosed is our order for 100 Laptops

Since we have good business relations with you and also that the lap-tops manufactured by you are the
best, we would like to place an order of 100 lap-tops on 60 days credit. You may check our credit with
Mr. Avinash Verma, General Manager, ICICI Bank, G-7, Sector – 42, Noida U.P.

We hope to receive your favourable response at the earliest. In case you need any other information.
Please contact us.

Sincerely yours,
Vinod Sharma
Purchase Officer
Request for Credit as a Guarantor
Example
The Omega Bank of Dhaka
Motijheel Circular Area, Dhaka
Dec. 1st, 04
Letter of Credit
Amount: Tk. 50.000.
Valid up to: Jan 25.05
Dear Sir,

We are pleased to introduce Mr. Mijanur Rahman, sales Manager, Star Network Ltd, Dhaka, Who has been a
valued customer of ours for the past ten (10) years. He is undertaking a tour of Chittagong, Khulna & Jessore to
explore the possibilities of setting up distribution outlets in these districts for their computer accessories.

We request you to provide him with required funds up to Tk. 50,000 (Taka fifty thousand only) against sight drafts
drawn on this office; each draft is issued by you should be clearly marked with L/C 50287

 This L/C is valid up to Jan 25, 04 and all drafts during this period will be honored by us

The amount of each draft should be entered on the back of this L/C.

Yours faithfully,
Khorshed Khan
Manager, Trade service
Trade service The Omega Bank of Dhaka.
Types of Reply
Letters granting credit
• State the feedback
• State the status of application
• State the terms and condition
Types of Reply
Letters refusing credit
• State the feedback
• State the status of application
• State the reason
Letters granting credit
Company
Street Address
City, State, Zip

[Date]
Addressee
Street Address
City, State, Zip

Dear _____________,
Thank you for expressing your confidence and goodwill by requesting a charge account.
Your references have been verified, and we have received satisfactory reviews from your
associates. An account has been opened for you, and we trust that you will use it soon and
often. You can order conveniently by telephone or on our website.
The terms for your account will be Net 30 Days; our accounting department will print your
statement on the last day of each month, and then any credited payment will be due within
30 days.
Now that you are an account holder, we will give you advance notice of any special sales
or other features of interest. We will also ensure that your needs are responded to on a VIP
basis.
Thank you again for your credit application.
We look forward to working with you in the very near future.
Sincerely yours,
Letters rejecting credit
Company
Street Address
City, State, Zip

Addressee
Street Address
City, State, Zip

Dear ______________,

Thank you for your recent order and your application for a line of credit with our company.
When determining customers' eligibility to open charge accounts, we fully investigate each
applicant, and we must always follow company policy.
We have reviewed your references and the other information provided on your application.
Based on the findings of our credit review process, we cannot justify opening an account
for you. If you believe that our decision is unwarranted, then please feel free to contact us
so that we may give you further details about our decision. We will still process and deliver
your order after payment is received. Your credit application will remain on file, and you
may reapply at any time.
Very truly yours,
Quiz

Please be seated with 3 feet distance

(minimum)
There are 4 versions of this quiz so if you
cheat, the joke is on you
Thank You