Letter of Credit means any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honor a complying presentation. It guarantees product protection and ensures flexible payment terms. Letters of Credit are also known as Banker’s Commercial Credit, Documentary Credit, and Letter of Undertaking. OCB, in its capacity as a consultant and facilitator has been providing consulting services for Letters of Credit since many years to a vast number of clients from countries across Asia, Middle East, North & South America, European Union and Africa.
There are several types of letters of credit, namely export or import letter of credit which are important for international trade. Importers and exporters generally need intermediaries, like banks or non-banking financial companies to ensure payment and timely delivery. Both the export and import letter of credit is substantially similar, only the perspective is different. An import letter of credit increases the trustworthiness of the importer while an export letter of credit eases the credit risk for the exporter and helps recover cash flow.