Professional Documents
Culture Documents
Compiled By:
Janata Bank Staff College
Dhaka
Bankers role in Foreign Trade
1. To Facilitate Payment
2. To Make Finance
Methods of Payment-
There are 4 Methods of
Payment-
1. 3. 4.
2
Cash in Documentary Documentary
Open Account Collection Credit
Advance
Origin of the term Letter Of Credit
…
Letter Of Credit
3. who acts on the
buyer’s behalf.
• -Bank promises to pay drafts,
• provided seller performs
• exactly.
Define Letter Of redit…Continued…
As per Article-2 of UCPDC – 600 Credit means –
any arrangement, however named or described, that is irrevocable and thereby
constitutes a definite undertaking of the issuing bank to honour a complying
presentation .
C) to accept bill of Exchange (draft) drawn by the beneficiary and pay at maturity
if the credit is available by acceptance.
Flow Chart of Doc. Credit
Advising Bank
Confirming Bank
Shipra Biswas, Faculty Member ,JBSC
Parties To A Letter Of Credit
• Applicant
• Beneficiary
• Issuing Bank
• Advising Bank
• Confirming bank
• Nominated Bank
• Confirming Bank
• Reimbursing Bank
Types of Letter of Credit :
• Irrevocable letter of credit :