A standard commercial Letter Of Credit is a document issued by a financial institution, primarily used in trade finance, that typically provides irreversible payments. A letter of credit can also be a source of payment in a transaction, meaning that an exporter may receive payment in lieu of a letter of credit. Letters of credit are mainly used in certain types of international business transactions, in which the supplier is located in one country and the customer is located in another country. They are also used for land development processes so that the construction works of approved public facilities (roads, footpaths, rain ponds, etc.) can be completed. The parties to a letter of credit usually have a beneficiary who receives the money and issuing bank to whom the applicant is a customer and a consulting bank whose beneficiary is a customer. Today, in this article, we will provide you all the information related to the Letter Of Credit Application Form PDF in detail. For this read our article carefully till the end.
Letter Of Credit Application Form PDF
A letter of credit refers to a non-fund-based credit guarantee given by a bank. But it is completely different from a bank guarantee. Many people mistake them to be one and the same. These are two different financial instruments and have different purposes. Almost all letters of credit are irrevocable or irrevocable, meaning that they cannot be amended or canceled without prior agreement between the beneficiary, the issuing bank, and the ratifying bank. The functions of GIRO (credit transfer-settlement system) and traveler’s checks in concluding a transaction are also contained in the letter of credit. Specifically, documents relating to the commercial invoices, bill of lading, and insurance to protect against loss or damage during transit of the ship, are to be produced by the beneficiary at the time of receiving payment.
|Article / Form||Letter Of Credit Application Form|
|Benefits||Ease of export and import|
|Beneficiary||Export-importing organizations or people|
|Purpose||To provide a guarantee of export-import correctness|
|LOC Application Form PDF||Download|
Some of the documents required under the letter of credit are as follows.
- Financial document => bill of exchange, co-sanctioned bill
- Commercial Documents => Invoice, Packing List
- Shipping Document => Transport Document, Certificate of Insurance, Commercial, Official or Legal Document
- Official Documents => Licence, Documents of Validation by Embassy, Certificate of Origin of Goods, Certificate of Inspection, Plant Sanitation Certificate
- Transport document => bill of lading (sea or polymorphic or gazetted side), airplane bill, lorry or truck receipt, railway receipt, the receipt issued by a CMC officer other than a partner company, issued by an officer of the consignment company Receipt, receipt of the consignee company, delivery related invoice, etc.
- Documents of Insurance => Insurance policy, or certificate but not cover note.
- If the buyer defaults, the bank will pay the seller.
- The buyer cannot cancel the order, even if it does, the bank will pay you, due to this the production risk is eliminated.
- The buyer gets the assurance that he will get the product at the right time.
- The seller gets some time to make the payment.
Legal Basis of the Letter Of Credit
Although all the documentary credits are bound to apply once it is given to the beneficiary, it is difficult to expect any compensation from the banker before the beneficiary submits the documents. In such transactions, the promise of the beneficiary to deliver the goods to the applicant is not sufficient for the bank’s promise as the sale agreement has already been entered into before the issue of credit, hence due diligence in these circumstances. Also, the performance of the current work under one agreement cannot be a justified reason for a new promise by the bank: the delivery of the goods may be the reason for giving force to the original agreement of sale, but it can be used in a second manner as before. The bar cannot be used to establish a bank-beneficiary enforceable relationship.
Type of Letter of Credit
- Commercial Letter Of Credit
- Standby Letter of credit
- Revocable LC
- Unconfirmed LC
- Transferable LC
- Back to Back LC
- Red Clause LC
- Green Clause LC
- Revolving LC
- Sight LC
- Deferred Payment LC (or Usance LC)
Download Letter Of Credit Application Form PDF
Here we will give you all the banks in which most of the work of letter of credit is done. They are providing the link to download their application form.
|IDFC Bank Letter Of Credit Application Form||Download|
|Key Bank Letter Of Credit Application Form||Download|
|Standard Chartered Bank (Pakistan) Limited LC Form||Download|
|YES Bank Ltd Letter Of Credit – Import Form||Download|
|Laxmi Bank Letter Of Credit Application Form||Download|
|ANZ Trade and Supply Chain Letter Of Credit Form||Download|
|AIB IN Letter Of Credit Application Form||Download|
|BOB Import Inland LC Application Form||Download|
|Bank of Baroda Letter Of Credit Application Form||Download|
|SBI Letter of credit application form pdf||Download|
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