A Red Letter of Credit serves as a crucial financial instrument in international trade transactions within the Malaysian legal framework. It is particularly utilized when businesses need a secure method of payment in cross-border transactions, providing protection to both buyers and sellers. The document incorporates specific requirements under Malaysian banking regulations, including the Financial Services Act 2013 and potentially Islamic banking principles, while also adhering to international standards such as UCP 600. A Red Letter of Credit typically includes detailed information about the transaction, parties involved, payment terms, and document requirements, serving as a bank's irrevocable commitment to pay upon presentation of compliant documents. This instrument is especially relevant in Malaysia's robust international trade sector, where it facilitates secure trade financing between Malaysian businesses and their international counterparts.

1. Letter of Credit Number and Date: Unique reference number and issuance date of the Letter of Credit

2. Issuing Bank Details: Complete name, address, and contact information of the issuing bank

3. Applicant Details: Full name, address, and contact information of the party requesting the Letter of Credit

4. Beneficiary Details: Full name, address, and contact information of the party in whose favor the Letter of Credit is issued

5. Currency and Amount: Specification of the currency and the exact amount in both figures and words

6. Expiry Date and Place: Clear statement of when and where the Letter of Credit expires

7. Document Presentation Period: Timeframe within which documents must be presented after shipment

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

9. Shipment Terms: Specific details about shipment including latest shipment date and partial shipments status

10. Description of Goods/Services: Detailed description of the goods or services covered by the Letter of Credit

11. Payment Terms: Specific conditions and timing of payment

12. Bank Charges: Allocation of banking charges between parties