Revolving Letter Of Credit for Pakistan

Revolving Letter Of Credit Template for Pakistan

A Revolving Letter of Credit document under Pakistani law is a specialized financial instrument that provides for automatic reinstatement of the credit amount after each utilization, subject to specified conditions and periods. This document follows the regulatory framework established by the State Bank of Pakistan, incorporating UCP 600 guidelines and local banking regulations. It details the terms of credit renewal, document requirements, payment conditions, and specific provisions for international trade transactions while ensuring compliance with Pakistani foreign exchange regulations and banking laws.

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What is a Revolving Letter Of Credit?

The Revolving Letter of Credit is a vital financial instrument used in international trade transactions under Pakistani jurisdiction. It is particularly suitable for ongoing business relationships where regular shipments occur between the same parties. The document provides a renewable credit facility that automatically reinstates after each utilization, either on a time or value basis, reducing the need for multiple credit applications. This type of Letter of Credit must comply with the State Bank of Pakistan's regulations, the Foreign Exchange Regulation Act, and international UCP 600 guidelines. It includes detailed specifications about credit limits, reinstatement conditions, document requirements, and payment terms, making it essential for businesses engaged in recurring international trade transactions. The document's structure accommodates both Pakistani legal requirements and international banking practices, ensuring smooth cross-border trade operations.

What sections should be included in a Revolving Letter Of Credit?

1. Letter Reference Number and Date: Unique identification number and issuance date of the LC

2. Issuing Bank Details: Complete name, address, and SWIFT code of the issuing bank

3. Beneficiary Information: Full name and address of the party in whose favor the LC is issued

4. Applicant Information: Full name and address of the party requesting the LC

5. Credit Amount and Currency: Maximum amount and currency of the LC, including revolving terms

6. Revolving Terms: Specific conditions of revolving - time basis or value basis, and reinstatement conditions

7. Expiry Date and Place: Validity period of the LC and location where it expires

8. Available With/By: Specified bank where credit is available and method of availability

9. Shipment Terms: Latest shipment date and partial/transhipment conditions

10. Document Requirements: List of required documents for presentation

11. Payment Terms: Sight payment, deferred payment, or acceptance terms

12. Special Conditions: Any specific conditions or requirements particular to this LC

What sections are optional to include in a Revolving Letter Of Credit?

1. Transferability Clause: Include when the LC needs to be transferable to another beneficiary

2. Back-to-Back Provisions: Include when the LC may be used as collateral for another LC

3. Red Clause: Include when advance payment provisions are required

4. Green Clause: Include when warehouse storage provisions are needed

5. Confirmation Instructions: Include when confirmation from another bank is required

6. Reimbursement Instructions: Include when specific reimbursement arrangements are needed

7. Insurance Requirements: Include when specific insurance coverage details need to be specified

What schedules should be included in a Revolving Letter Of Credit?

1. Schedule A - Commercial Invoice Requirements: Detailed specifications for commercial invoice presentation

2. Schedule B - Transport Document Requirements: Specific requirements for bills of lading or other transport documents

3. Schedule C - Goods Description: Detailed description of goods, quantities, and unit prices

4. Schedule D - Document Presentation Schedule: Timeframes and requirements for document presentation

5. Appendix 1 - Bank Draft Format: Prescribed format for drafts to be drawn under the LC

6. Appendix 2 - Revolving Schedule: Detailed schedule of revolving periods and reinstatement conditions

7. Appendix 3 - Amendment Request Form: Standard form for requesting amendments to the LC

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

Pakistan

Publisher

Genie AI

Document Type

Letter of Credit

Cost

Free to use
Relevant Industries

Banking and Financial Services

International Trade

Manufacturing

Import/Export

Retail

Wholesale

Commodities Trading

Textiles

Agriculture

Pharmaceuticals

Electronics

Automotive

Relevant Teams

Trade Finance

International Banking

Credit Operations

Legal & Compliance

Treasury

Risk Management

Foreign Exchange

Documentary Credits

Trade Operations

Banking Operations

Relevant Roles

Trade Finance Manager

International Trade Specialist

Letter of Credit Officer

Compliance Officer

Financial Controller

Treasury Manager

Import Manager

Export Manager

Banking Operations Manager

Credit Risk Officer

Documentary Credits Specialist

Chief Financial Officer

Trade Operations Manager

Banking Relationship Manager

Foreign Exchange 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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