The Irrevocable Letter of Credit serves as a fundamental instrument in international trade finance, providing payment security in cross-border transactions. This document is typically used when an importer (buyer) needs to provide payment assurance to an exporter (seller) in international trade dealings. Under Indian jurisdiction, it follows the guidelines set by the Reserve Bank of India, complies with the Banking Regulation Act, 1949, and adheres to international UCP 600 rules. The document details the conditions for payment, required documentation, timelines, and obligations of all parties involved. It is particularly crucial in situations where parties are new to each other or when significant transaction values are involved, as it offers security to the seller while providing the buyer with control over payment release through document verification.
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1. Letter Reference Number and Date: Unique LC number and issuance date for identification and tracking
2. Issuing Bank Details: Complete name and address of the bank issuing the Letter of Credit
3. Beneficiary Details: Full name and address of the party in whose favor the LC is issued
4. Applicant Details: Full name and address of the party requesting the LC
5. Credit Amount and Currency: Specific amount and currency of the Letter of Credit, including any tolerance levels
6. Type and Form of Credit: Clear statement that this is an irrevocable LC and whether it's transferable
7. Expiry Date and Place: Specific date and location where the LC expires
8. Available With/By: Details of how and where the credit is available (payment, acceptance, negotiation)
9. Shipment Terms: Latest shipment date and any partial shipment/transshipment conditions
10. Document Presentation Period: Timeframe within which documents must be presented after shipment
11. Required Documents: List of all documents required for presentation under the LC
12. Additional Conditions: Any specific conditions or requirements that must be met
13. Charges: Specification of which party bears various banking charges
1. Confirmation Instructions: Used when the LC requires confirmation from another bank
2. Transferability Conditions: Included when the LC is transferable, specifying transfer conditions
3. Back-to-Back LC Terms: Required when the LC allows for back-to-back arrangements
4. Red Clause Provisions: Included when advance payment facilities are provided under the LC
5. Revolving Terms: Used for revolving LCs, specifying reinstatement conditions
6. Special Payment Terms: For deferred payment or acceptance credits
7. Swift Instructions: Specific instructions for SWIFT messaging when applicable
1. Schedule A - Documentary Requirements: Detailed list and format of required documents including commercial invoice, transport documents, insurance documents, etc.
2. Schedule B - Special Payment Terms: Detailed payment schedule for deferred payment credits or specific payment arrangements
3. Schedule C - Goods Description: Detailed description of goods or services covered under the LC
4. Appendix 1 - UCP 600 References: Specific articles of UCP 600 applicable to this LC
5. Appendix 2 - Bank's Standard Terms: Standard terms and conditions of the issuing bank applicable to LCs
Relevant legal definitions
Advising Bank
Applicant
Banking Day
Beneficiary
Bill of Exchange
Bill of Lading
Commercial Invoice
Complying Presentation
Confirmation
Credit
Documents
Draft
Expiry Date
FEMA
Force Majeure
Goods
Incoterms
Issuing Bank
Letter of Credit
Negotiating Bank
Negotiation
Original Documents
Packing List
Presentation
Reimbursing Bank
Shipment
SWIFT
UCP 600
Underlying Transaction
Unit Price
Applicant
Banking Day
Beneficiary
Bill of Exchange
Bill of Lading
Commercial Invoice
Complying Presentation
Confirmation
Credit
Documents
Draft
Expiry Date
FEMA
Force Majeure
Goods
Incoterms
Issuing Bank
Letter of Credit
Negotiating Bank
Negotiation
Original Documents
Packing List
Presentation
Reimbursing Bank
Shipment
SWIFT
UCP 600
Underlying Transaction
Unit Price
Clauses
Credit Amount and Currency
Availability and Expiry
Documentary Requirements
Payment Terms
Bank Charges
Force Majeure
Governing Law
Dispute Resolution
Assignment and Transfer
Amendment
Presentation Terms
Document Examination
Discrepancy Handling
Bank's Rights and Obligations
Applicant's Undertaking
Compliance with Regulations
Anti-Money Laundering
Sanctions Compliance
Notices
Confirmation
Negotiation Terms
Document Rejection
Reimbursement
Default
Indemnification
Availability and Expiry
Documentary Requirements
Payment Terms
Bank Charges
Force Majeure
Governing Law
Dispute Resolution
Assignment and Transfer
Amendment
Presentation Terms
Document Examination
Discrepancy Handling
Bank's Rights and Obligations
Applicant's Undertaking
Compliance with Regulations
Anti-Money Laundering
Sanctions Compliance
Notices
Confirmation
Negotiation Terms
Document Rejection
Reimbursement
Default
Indemnification
Relevant Industries
Banking and Financial Services
International Trade
Import/Export
Manufacturing
Retail
Commodities Trading
Agriculture
Mining
Textile
Oil and Gas
Shipping and Logistics
General Commerce
Relevant Teams
Finance
International Trade Operations
Treasury
Legal
Compliance
Risk Management
Trade Documentation
Supply Chain
Procurement
Banking Operations
Credit Administration
Relevant Roles
Trade Finance Manager
Import Manager
Export Manager
Credit Manager
Treasury Manager
Financial Controller
International Business Development Manager
Trade Operations Officer
Documentary Credits Specialist
Compliance Officer
Risk Manager
Banking Relationship Manager
Chief Financial Officer
International Trade Specialist
Supply Chain Manager
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