rohit sharma edfm presentation

8/7/2019 Rohit Sharma EDFM PRESENTATION

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Presented By:-

Rohit Kumar Sharma

MMM 4th sem.

Roll No. - 42


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A letter from a bank guaranteeing that a

buyer's payment to a seller will be received

on time and for the correct amount. In the

event that the buyer is unable to makepayment on the purchase, the bank will be

required to cover the full or remaining

amount of the purchase.


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The English name letter of credit derives

from the French word accreditation, a

power to do something, which in turn is

derivative of the Latin word accreditivus,meaning trust. This applies to any defense

relating to the underlying contract of sale.

This is as long as the seller performs their

duties to an extent that meets therequirements contained in the letter of

credit


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Financial Documents

Bill of exchange, Co-accepted draft

Commercial Documents

Invoice, Packing list

Shipping DocumentsTransport Document, Insurance Certificate, Commercial,

Official or Legal Documents


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Official Documents

License, Embassy legalization, Origin Certificate,Inspection Certificate, Phytosanitary certificate

Transport Documents

Bill of Lading (ocean or multi-modal or Charter party),Airway bill, Lorry/truck receipt, railway receipt, CMC

Other than Mate Receipt, Forwarder Cargo Receipt, Deliver

Challan...etc

Insurance documents

Insurance policy, or Certificate but not a cover note.


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All the charges for issuance of Letter of Credit,

negotiation of documents, reimbursements and

other charges like courier are to the account of

applicant or as per the terms and conditions ofthe Letter of credit. If the letter of credit is

silent on charges, then they are to the account

of the Applicant. The description of charges and

who would be bearing them would be indicated

in the field 71B in the Letter of Credit


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Advance payment (most secure for seller)

Documentary Credit (more secure for seller

as well as buyer)

Documentary collection (more secure forbuyer and to a certain extent to seller)

Direct payment (most secure for buyer)


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Revocable letter of credit

An irrevocable LC cannot be changed unless both the

buyer and seller agree.

Irrevocable letter of credit

a revocable LC changes to the LC can be made without the

consent of the beneficiary.


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Irrevocable unconfirmed letter of creditThe correspondent bank merely advisable the beneficiary

that the credit has been opened. It does not itself gives an

undertaking to pay, under no obligation to honour

documents presented to it by the beneficiary.

Irrevocable confirmed letter of credit

It gives the beneficiary a double assurance of payment,

since it represents both the undertaking of the Issuingbank and the undertaking of confirming bank.


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