Do you know how work a Master LC? Commercial
What is a Letter of Credit (L/C)? L/C means a letter of credit. The technical term for a letter of credit is 'Documentary credit.' It is a common word for Merchandisers in Apparel merchandising. L/C is a payment term generally used for international sales transactions. L/C deals only in documents but not goods. L/C works in favor of both the Buyer and the Seller. The bank that issues the L/C is termed an Issued bank or Buyer's bank. The bank that advises the L/C to the Seller is called an Advising bank or Seller's bank. There are mainly two types of L/C. these are- Master L/C and Back-to-back L/C. Both of those are described below: What is Master L/C? When an L/C is opened to import goods directly from the exporter is called a master letter of credit. This L/C is issued by the Buyer (Buyer's bank) to the manufacturer. Master LC has a higher financial value than back-to-back L/C. What is Back-to-Back L/C? When the manufacturer prepares an L/C to coll...