LC
A letter of credit is a payment method in which a bank guarantees a payment.
The L/C is opened by the importer to the main bank of the exporter.
It's a way of trading that banks guarantee. Exporters can receive expenses from banks.
Only
How the exporter pays interest.
" shipper's usance"
How the importer pays interest to the bank.
"Banker's usance"
Order of Transaction
1. Importer opens "draft LC" as Exporter's main trading bank.
2. The exporter checks the LC.
3. The importer issues an official LC.
4. The exporter will ship the goods after checking the official LC.
5. The exporter asks the bank to pay for the product after sending it.
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