Standby Letter of Credit Standby letter of credit is a guarantee and is mainly used in USA where according to local laws American Banks are not permitted to issue guarantees. Standby LC differs from a documentary letter of credit in that the latter requires “performance” while the former requires “non-performances” i.e. under a documentary letter… Read More »
Transferable LC A transferable LC is designated as transferable by the LC issuing bank, under which the beneficiary (first beneficiary) may request the advising bank (the transferring bank) to make the credit available in whole or in part to one or more other Beneficiary(ies) (second beneficiary(ies). Such Credits are governed by Article 48 of… Read More »
What is Red Clause LC? A Red Clause LC is a documentary credit with a special clause incorporated in it, authorizing the advising bank or the conforming bank to make advances to the beneficiary before presentation of documents stipulated therein. It will have the following information. It will bear a clause typed in red authorizing… Read More »
Difference between Letter of Credit and Drafts Difference between two payments methods of international trade – Letter of credit and Drafts are given below: