Inland / Foreign Letter of Credit
A letter of credit is an obligation of the bank that opens the letter of credit (the issuing bank) to pay the agreed amount to the seller on behalf of the buyer, upon receipt of the documents specified in the letter of credit under domestic business transaction.

An inland letter of credit is exactly like a regular letter of credit or foreign letter of credit. The only difference between the two is that a foreign letter of credit is used for international transactions, whereas the inland letter of credit is used for domestic transactions. Consequently, we can say that this letter of credit is a payment instrument used to facilitate domestic / international trade.

“My Rupee Mantra” experts advise you in drafting the Letter of Credit terms and conditions so as to protect your interests. The experts find the best suited Bank for the client for issuance of letter of credit at competitive terms and conditions.

How does a Letter of Credit works?

Step 1 – The buyer and seller enter into a contract stating that payment be made on the basis of Letter of Credit.
Step 2 – Buyer approaches our team to get issued the Letter of Credit in favour of the seller from a Bank.
Step 3 – Bank issues Letter of Credit which is advised through its branch or correspondent bank in the seller’s country
Step 4 – Advising bank advises Letter of Credit to the seller
Step 5 – Upon receipt of the Letter of Credit, the seller prepares shipment and delivers documents to seller’s Bank.
Step 6 – Presenting bank dispatches documents to the LC issuing Bank for payment
Step 7 – Buyer pays the Invoice amount to LC issuing Bank. In return, Bank forwards the documents to the buyer, who can now use them to obtain the goods.