letter of credit

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letter of credit:

see credit, letter ofcredit, letter of,
commercial instrument through which a bank or other financial institution instructs a correspondent institution to advance a specified sum of money to the bearer.
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credit, letter of,

commercial instrument through which a bank or other financial institution instructs a correspondent institution to advance a specified sum of money to the bearer. The document is called a circular letter of credit when it is not addressed to any particular correspondent. In effect, a letter of credit is a draftdraft,
in banking, order by one party to another party to pay a stated sum to the person or firm in whose favor the draft is made. It is similar in form to the ordinary bank check. Often the drawer and the drawee of a draft are the same person.
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, save that the amount is merely stated as a maximum not to be exceeded. Letters of credit, mainly used by travelers, greatly simplify nonlocal business transactions. Those who issue such letters are usually so well known that any bank will honor the letter upon proper identification. Travelers' checks are a modified form of a letter of credit. They are issued in coupons, upon whose face a value is usually expressed in terms of the currency of a particular country. In the United States they are issued by express companies and banks. Circular letters of credit require that each payment, as it is made, be endorsed by the firm making payment so that other banks may know how much of the total credit has been used.
References in periodicals archive ?
uCaCertificate for Documentary Credit Specialists (CDCSA) - this is designed primarily for documentary letter of credit practitioners, those in banks and major exporters/ importers that depend on expertise in this specialist field.
Speakers at the seminar included: Vincent O'Brien, a member of the ICC Banking Commission and ICC and Chair of the ICC Market Intelligence Group; and Khalil Matar a Certified Documentary Credit Specialist, a certified internal auditor.
Kashani Zadeh, Hoda, comparative study of obligations of beneficiary and issuer of documentary credit against each other in The Uniform Customs and Practice for Documentary Credits (UCP600) and Article 5 of the Uniform Commercial Code of the United States of America (UCC), Journal of International Law, the Journal of the affairs Centre of International Law, Legal Assistance of presidential parliamentary affairs 26th year, 40: 314-344.
Global Banking News-September 28, 2012--Pharma company issues first RMB documentary credit in India(C)2012 ENPublishing - http://www.
However, since documentary credits involve relatively higher banking fees and more complex documentary procedures, this option is not always appropriate.
The offer also includes direct payment capability; full trade related services, eg documentary credits and collections; and foreign exchange transacting and hedging delivered via the bank's own internet banking platform.
With a series of sessions planned over the next couple of months to cover a host of topics in the field including international trade, the first workshop centred on one of the most successful set of private rules for trade ever developed, the Uniform Customs and Practice for Documentary Credits (UCP 600).
Algiers, 26 August: The External Bank of Algeria (BEA) proposes to raw materials importers, deferred-payment documentary credits and interim credits, under the complementary finance act 2009, the bank CEO Mohamed Loukal told APS on Wednesday.
It produces universally accepted rules and guidelines for documentary credits, documentary collections, bank-to-bank reimbursement and bank guarantees.
To learn more about international business, global traders should become familiar with the United Nations Convention on Contracts for the International Sale of Goods (UNCISG) and the International Chamber of Commerce's Uniform Customs and Practices for Documentary Credits.
The project will provide a facility to guarantee documentary credits originated by selected commercial banks in Pakistan.