Black Lc Loan

LC Loan

Bank offers the LC Bill Discounting facility to its customers.

A Letter of Credit (LC) is a document issued by your bank that essentially acts as an irrevocable guarantee of payment to a beneficiary. This means that if you do not perform your obligations, your bank pays. The letter of credit can also be the source of repayment of the transaction meaning that the exporter will get paid with the redemption of the letter of credit.

Requirements

• The bills should be drawn under irrevocable Letter of Credits issued by a Commercial Bank in India.
• The Bills drawn are in strict conformity with the terms of the LC.
• Bills of exchange should have arose out of bona fide commercial or trade transactions.
  

Documents to be submitted

• Bill of exchange
• Letter of credit
• Receipted Challan being proof of delivery of goods/ Documents of title to goods evidencing despatch of goods (RR/ LR/ shipping documents)
• Any other relevant documents.
  

The bills should be got accepted by the drawee through their bankers. In addition to the interest for the usance period, actual postage and handling charges will also be collected.

TYPES OF LETTERS OF CREDIT

Revocable letter of credit

Just like the name says the LC can be revoked by the Issuing Bank without the agreement of the beneficiary.

Irrevocable letter of credit

Can not be cancelled or amended without all the parties agreement.

Standby letter of credit

Guarantee of payment. If the beneficiary does not get paid from its customer it can then demand payment from the Bank by forwarding the copy of the invoice that was not paid and supporting documentation.

Revolving letter of credit

It is established when there are regular shipments of the same commodity between supplier and customer. Eliminates the need to issue an LC for each individual transaction