What Is Letter Of Credit ?

Letter Of Credit

A Letter Of Credit or L/C is a form of payment document made in between two parties – mostly a purchaser and a seller.  An L/C is created mainly to protect the interest of a supplier who is ready to sell his goods or services to a purchaser who is unknown to them.  Mainly this system required when both parties are in different countries.  In a LC mode of payment, the banker of Purchaser functions like a mediator.  The banker of purchaser and seller intervenes between the two parties to ensure the payment happens when the goods or service is supplied as required and agreed.

Also Read

1. Read What is Cash?
2. Read What is Cheque?
3. See What is Banker / Manager Cheque?
4. See What is a Pay Order?
5. Know What is Account Payee Cheque / Crossed Cheque?
6. Know What is Crossing of a Cheque Mean?
7. Read What is an Order Cheque?
8. Read What is a Bearer Cheque?
9. See What is an Open Cheque?
10. See What is a Self Cheque?
11. Know What is a Post-Dated Cheque?
12. Know What is a Pre-Dated Cheque?
13. Read What is a Stale Cheque?
14. Read What is a Mutilated Cheque?
15. See What is a Travellers Cheque?
16. See What is Telegraphic Transfer?
17. Know What is a Demand Draft?
18. Know What is a Travel Card?
19. Read What are the types of Travel Cards?
20. Read What is a Branded Credit Card or Debit Card?

Must Know !!

• What is KFON?

Letter Of Credit