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4 A BFM letters of credit
What is a Letter of Credit (LC) in international trade?
A Letter of Credit is a written undertaking by a bank (issuing bank) on behalf of the buyer (applicant) to pay the seller (beneficiary) a specified amount, provided the seller presents complying documents within the stipulated time.
What is the maximum credit period allowed under a usance LC for imports in India?
RBI permits usance LCs up to 360 days from shipment date.
Which international rules primarily govern Letters of Credit?
Letters of Credit are primarily governed by the Uniform Customs and Practice for Documentary Credits (UCP 600), published by the International Chamber of Commerce (ICC), which came into effect on 1 July 2007.
What is the liability of the issuing bank in a documentary LC transaction?
Issuing bank undertakes primary liability to honour complying presentations.
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