Letter of Credit

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A Letter of Credit is a document which is sent from a lender or financial bodies and gives Bank Guarantees that a seller gets a Buyer  payment of full amount and on time. It is provided by a third party.

Types of Letters of Credit

There are several types of letters of credit (LC) given below:-

• Stand-by LC
• Confirmed LC
• Irrevocable LC
• Revocable LC
• Un-transferable LC
• Export / Import LC
• Commercial LC
• Back-to-Back LC
• Red clause LC
• Green clause LC
• Deferred payment LC
• Direct pay LC
• Sight LC
• Transferable LC
• Unconfirmed LC
• Revolving LC

Documents required for Letter of Credit

• 2 passport size photographs
• Aadhar card + Passport
• Copy of PAN Card
• Address proof: - if rented and also needed permanent address
• Sanction letter  
• Loan schedule
• Cheque for processing fee
• Appointment letter and last 3 months’ salary slip
• Bank statement of last 1 year
• Complete property documents with ATS + MAP and Chain
• ITR with computation of income for the last 3 years.
• Eligibility criteria for letter of credit

Eligibility criteria for letter of credit depends on many factors such as repayment history, age of an individual, total work experience, business or sales turnover, and creditworthiness, etc.

• The minimum age of the borrower should be 23 years and maximum are 65 years.
• The borrower must have a certificate of inspection and origin.
• License of import and export trading
• Companies who are involved in import and export trading can apply
• The promoter’s background must be good in repayment history and financial record.