Scribd Logo
Upload

Welcome to Scribd!

  • 2 views

    LC Process Flow

    Uploaded by

    soumyarm942
    The letter of credit process involves 10 steps: 1) The buyer fills out an application. 2) The issuing bank reviews the application. 3) The issuing bank sends the letter of credit to the beneficiary's bank. 4) The beneficiary's bank reviews the letter of credit and sends it to the beneficiary. 5) The beneficiary ships the goods according to the letter of credit terms. 6) The beneficiary submits documents to their bank. 7) The documents are examined and payment is made. 8) The issuing bank examines the documents and reimburses the negotiating bank. 9) The issuing bank debits the buyer's account and releases documents. 10) The buyer exchanges documents for goods.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    LC Process Flow

    Uploaded by

    soumyarm942
    2 views2 pages
    The letter of credit process involves 10 steps: 1) The buyer fills out an application. 2) The issuing bank reviews the application. 3) The issuing bank sends the letter of credit to the beneficiary's bank. 4) The beneficiary's bank reviews the letter of credit and sends it to the beneficiary. 5) The beneficiary ships the goods according to the letter of credit terms. 6) The beneficiary submits documents to their bank. 7) The documents are examined and payment is made. 8) The issuing bank examines the documents and reimburses the negotiating bank. 9) The issuing bank debits the buyer's account and releases documents. 10) The buyer exchanges documents for goods.

    Original Description:

    lllc

    Original Title

    LC Process

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The letter of credit process involves 10 steps: 1) The buyer fills out an application. 2) The issuing bank reviews the application. 3) The issuing bank sends the letter of credit to the beneficiary's bank. 4) The beneficiary's bank reviews the letter of credit and sends it to the beneficiary. 5) The beneficiary ships the goods according to the letter of credit terms. 6) The beneficiary submits documents to their bank. 7) The documents are examined and payment is made. 8) The issuing bank examines the documents and reimburses the negotiating bank. 9) The issuing bank debits the buyer's account and releases documents. 10) The buyer exchanges documents for goods.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    2 views2 pages

    LC Process Flow

    Uploaded by

    soumyarm942
    The letter of credit process involves 10 steps: 1) The buyer fills out an application. 2) The issuing bank reviews the application. 3) The issuing bank sends the letter of credit to the beneficiary's bank. 4) The beneficiary's bank reviews the letter of credit and sends it to the beneficiary. 5) The beneficiary ships the goods according to the letter of credit terms. 6) The beneficiary submits documents to their bank. 7) The documents are examined and payment is made. 8) The issuing bank examines the documents and reimburses the negotiating bank. 9) The issuing bank debits the buyer's account and releases documents. 10) The buyer exchanges documents for goods.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 2

    LC Process flow:

    Step-1: The buyer fills out a letter of credit application from the buyers bank which satisfies the terms
    of the purchase agreement plus the requirements of customs law, shipment and document
    coordination.
    0 Step-2: 2 The issuing bank, usually the buyers bank, rechecks the application to ensure that it is

    complete and workable.


    Step-3: 03 The issuing bank transmits the credit to a correspondent bank or the beneficiarys bank by
    S.W.I.F.T., telex, and asks it to advise and/or confirm the instrument.
    0 Step-4: 4 The correspondent bank receives the letter of credit, checks authenticity, records, and

    transmits the instrument to the seller/beneficiary, adding their confirmation if requested and if they
    agree to do so. Upon receipt of the letter of credit, the seller should carefully review it to determine
    whether the seller can comply with its performance requirements and whether it is acceptable.
    Step-5: Upon determination that the letter of credit is acceptable, the seller should ship the goods
    precisely pursuant to its terms and conditions.
    0 Step-6: 6 The seller must prepare documents exactly as required and present them to the bank where

    the LC is available. The proper paying bank may be any bank specified in the credit to accept, pay or
    negotiate. This may be an advising bank, confirming bank, issuing bank or (on a freely negotiable credit)
    any bank that is willing to negotiate.
    Step-7: When the bank where presentation is made receives the documents, it will examine them to
    determine if they are in order pursuant to the credits terms and conditions. If in order, the bank may
    pay, accept, or negotiate as required by the letter of credit. The negotiating bank will transmit the
    documents to the issuing bank and request reimbursement. Under an LC payable at sight, the issuing
    bank may effect reimbursement to the sellers bank by remitting funds directly to the sellers bank,
    authorizing the sellers bank to debit the issuing banks account, or by authorizing the sellers bank to
    claim from a third bank where the issuing bank maintains an account.
    Step-8: Upon receipt of the documents, the issuing bank will examine them to ensure that they are in
    order as specified and then reimburse the negotiating bank.
    Step-9: Issuing bank debits the buyers account and releases documents. The sellers bank pays the
    exporter after being reimbursed by the buyers bank.
    1 Step-10: 0 The buyer exchanges the shipping documents for the goods.

    You might also like