Letters of Credit

Expand your business into new areas with customised trade terms and conditions.
Expand your business into new areas with customised trade terms and conditions.

Letters of Credit

A Letter of Credit (LC) is an irrevocable undertaking by a Bank on behalf of its Customer/Buyer for payment to Seller/Supplier/Exporter, as per tenor of LC, provided the required documents are presented in conformity with LC terms. This method protects the Buyer, since no payment obligation arises until the documents proving that the goods have been shipped or delivered as proposed are presented.

Type of Facility - Sight/Usance/Revolving

Features and Benefits

  • Governed under UCP 600
  • Irrevocable- the terms and conditions cannot be changed without the agreement of all the parties (Buyer and Seller)
  • Deals in documents, not goods
  • Negotiability- facilitates Supplier/Beneficiary to raise credit
  • Empowers to transact with unknown partners in new geographical areas
  • customizing trade terms and conditions
  • For Buyer

    • Demonstration of Solvency of Buyer
    • No Requirement of payment
    • No payment till availability of required documents
    • Can avail deferred payment terms from seller

    For Seller

    • Reduction in Risk of Non-payment
    • Assured of payment on compliance of LC terms
    • Can raise finance


  • All forms of legal entities engaged in trading, manufacturing or other productive economic activities with sanctioned credit limits. Please contact Bank for credit facilities.

Documents Required

  • Application
  • Trade License
  • Copy of Proforma Invoice/Purchase Order, if any.
  • Insurance Policy for adequate amount with Bank’s Name
  • Modest collateral requirements.

Terms & Conditions apply

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