sample document letter of credit
Documentary letter of credit is an undertaking of a bank to pay the beneficiary on behalf of the applicant. All the documents provided must strictly adhere to the terms and conditions of the credit. Three parties are involved to a documentary credit- the buyer (importer), the beneficiary (supplier of goods) and the issuing bank which issues the credit in the favor of the buyer. The advising bank helps the beneficiary in getting the payment from the issuing bank. I am going to write a sample document letter of credit highlighting the main features to be written in it.
The main features of the sample document letter of credit along with format include:
1. Mention the name of the person to whom you are addressing along with swift code. State clearly that the documentary credit letter will be irrevocable after its transfer and confirmation.
2. Documentary credit number is to be given (Documentary credit number: )
3. Date of issue of the credit letter. (Issued Date: )
4. The bank which has issued the credit letter on behalf of the importer (buyer). (Name of Bank Issuing Letter of Credit: )
5. The name of the beneficiary (exporter of goods).
6. The name of the confirming bank/ advising bank/ beneficiary bank. (Beneficiary Bank: )
7. Currency in which the transaction will takes place. (Currency: )
8. The name of the authorized person and the authorized body.
9. Specification of the limit of the credit. (Credit Limit: )
10. The name of the bank that will confirm the credit for the beneficiary.
11. The date on which the contract period will get expired. (Date of Expiry: )
12. Specification of the mode of payment. (Payable at: )
13. The name of the person in whose favour the draft will be drawn. (Draft to be drawn in favor of: )
14. Terms and conditions of the shipment of goods. (Shipment terms: )
15. The latest date on which the shipment of goods can take place. (Maximum date of Shipment: )
16. State whether the partial shipment is allowed or not. (Partial Shipment: )
17. State the quantity of goods that will be exported based on monthly instalment.
18. Mention the contract number and date along with the name of the commodity. (Description of Goods: )