letter of credit

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Related to letters of credit: Standby Letters of Credit

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 ?
All needed information on letters of credit is available in clients personal accounts in Sberbank Business Online: terms and conditions of general agreements, correspondence with the bank on letters of credit in one window, application statuses, register of letters of credit and correspondence on them.
During the workshop, O'Brien briefed participants on the most effective steps of agreeing the terms and conditions of international trade documentary credit, and highlighted international standards, guidelines and case studies related to managing letters of credit.
Letters of credit for smaller amounts can be somewhat expensive because fees can be high relative to the sale.
Jehad Kazim, Director, Legal Services Department, Dubai Chamber, stated that with commodity prices tumbling, the challenges and conflicts in managing documentary letters of credit has increased dramatically, therefore this seminar educated the participants on how to face these challenges.
Standby letters of credit are conditional commitments issued by Severn guaranteeing performance by a customer to various municipalities.
"I will not be held responsible for the consequences of not issuing letters of credit, as the release of such funds under previous government was not based on a clear procedure and only happened under exceptional circumstances, despite [the funds] amounting to a large share of the Treasury's deficit," he said.
RBS will be able to issue Letters of Credit (LCs) directly from Singapore to guarantee deliveries of Oman Blend crude oil through the DME, helping to create a more efficient and cost-effective trading ecosystem around the Exchange.
2--Assignment of revenues may be proper, if using letters of credit is for financing sales transactions, but the terms stipulated in section (2) 5-116 cannot be cited, because of generalizing letter of some applications credit to many fields of commercial activity.
furnished 10 letters of credit ostensibly issued by a local bank to support the agreement, which he signed on behalf of the contracting company in his capacity as a director.
As banks adjust, companies with strong credit profiles may find that conditional surety bonds are a cost-effective alternative to bank letters of credit.
The refusal of international business to take letters of credit from Greek merchants is particularly troubling.
The four-year, asset-based credit facility provides for borrowings up to USD50m for working capital requirements, letters of credit and other general corporate purposes, increasing to USD75m during the upcoming peak sales period.