LC SBLC for India

LC SBLC Template for India

A Letter of Credit (LC) or Standby Letter of Credit (SBLC) is a crucial banking instrument regulated under Indian law, particularly by the Reserve Bank of India (RBI) and governed by international practices such as UCP 600. This document serves as a bank's irrevocable commitment to pay a specified sum to a beneficiary upon the presentation of compliant documents. Under Indian jurisdiction, these instruments must comply with FEMA regulations, RBI guidelines, and the Banking Regulation Act, making them secure payment mechanisms for international trade and financial transactions.

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What is a LC SBLC?

Letters of Credit (LC) and Standby Letters of Credit (SBLC) are fundamental banking instruments used to facilitate secure international trade and financial transactions. These documents are particularly important in the Indian context, where they must comply with RBI guidelines, FEMA regulations, and international banking practices. An LC/SBLC serves as a bank's guarantee to pay, typically used in import-export transactions or as security for financial obligations. The document outlines the conditions for payment, required documentation, and timeframes, providing security to both parties in a transaction. Under Indian jurisdiction, these instruments are commonly used to mitigate risks in cross-border transactions and ensure compliance with foreign exchange regulations.

What sections should be included in a LC SBLC?

1. Letter Reference and Date: Unique reference number and date of issuance of the LC/SBLC

2. Form/Type of Credit: Specification of whether it's an LC or SBLC and whether it's irrevocable

3. Parties Details: Full details of the issuing bank, beneficiary, and applicant including addresses and reference numbers

4. Currency and Amount: The currency and amount of the credit in both figures and words

5. Expiry Details: Date and place of expiry of the credit

6. Presentation Terms: Where and how documents should be presented, including any time limits

7. Available With/By: Specification of how the credit is available (by sight, deferred payment, acceptance, or negotiation)

8. Partial Shipments/Transhipment: Whether partial shipments or transhipment are allowed or prohibited

9. Required Documents: Detailed list of all documents required for presentation

10. Additional Conditions: Any special conditions or terms that must be met

11. Charges: Details of bank charges and who bears them

12. Period for Presentation: The time period within which documents must be presented after shipment/service

What sections are optional to include in a LC SBLC?

1. Shipment Terms: Used when LC relates to goods shipment, including latest shipment date and shipment details

2. Transfer Conditions: Include when the credit is transferable, specifying transfer terms and conditions

3. Confirmation Instructions: Used when confirmation is requested from another bank

4. Revolving Terms: Include for revolving LCs, specifying reinstatement conditions

5. Back-to-Back Provisions: Used in back-to-back LC arrangements

6. Red Clause Provisions: Include when advance payment facilities are provided

7. Green Clause Provisions: Used when storage facilities are involved in the transaction

What schedules should be included in a LC SBLC?

1. Document Presentation Form: Standard form for presenting documents under the LC/SBLC

2. Commercial Invoice Format: Required format for commercial invoices

3. Transport Document Requirements: Detailed specifications for required transport documents

4. Amendment Request Form: Standard form for requesting amendments to the LC/SBLC

5. Bank Draft Template: Format for any bank drafts required under the credit

6. Underlying Contract Summary: Summary of the underlying commercial contract or agreement

7. Specimen Signatures: Authorized signatures for the parties involved

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

India

Publisher

Genie AI

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking & Financial Services

International Trade

Manufacturing

Import/Export

Retail

Commodities Trading

Construction

Energy

Telecommunications

Shipping & Logistics

Agriculture

Relevant Teams

Legal

Finance

Treasury

International Trade Operations

Risk Management

Compliance

Trade Finance

Documentary Credits

Banking Operations

Supply Chain Operations

Relevant Roles

Trade Finance Manager

International Business Manager

Financial Controller

Treasury Manager

Import/Export Manager

Credit Manager

Banking Operations Manager

Trade Operations Officer

Compliance Officer

Risk Manager

Documentary Credits Specialist

Chief Financial Officer

Legal Counsel

Banking Relationship Manager

Supply Chain Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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