Lc full form: What is Letter of Credit ( LC

What is Letter of Credit ( LC )? Letter of Credit ( LC ) is the most secured and widely used form of international trade transaction method. An LC is a commitment on behalf of the importer by a bank in the importer’s country that the payment will be made to the exporter if he meets the terms and conditions as stated in the LC . Guide to what is Full Form Of LC. We explain its features, types, example, elements, importance, advantages & disadvantages. What is a Letter of Credit? A Letter of Credit ( LC ) is a financial instrument used in international trade to provide payment security. It guarantees that the seller will receive payment from the buyer, as long as the seller fulfils the agreed-upon terms and conditions. LCs help mitigate risks for both parties involved in the transaction. It can be issued against a pledge of securities or cash. Banks typically collect a fee i.e., a percentage of the size/amount of the Letter of Credit. Letter of Credit is a written document by an importer’s bank assuring the seller receives payment on fulfilling agreed terms and submitting LC documents.