Definition
of LC: It means Letter of
credit. It is a commitment letter issued by a bank on behalf of the importer in
favor of the exporter. Through this letter bank make commitment to the exporter
that increase of importer unable to pay the bill after receiving the goods
according to all terms and condition then bank will pay the bill to the
exporter.
1. Commercial LC: A standard LC, also called as documentary
credit.
2. Revocable: The LC can be cancelled or changed at any time by the
buyer or the issuing
bank without any notification. Such types of letter are not used frequently as the beneficiary is not provided any protection.
3. Irrevocable
LC: