Page 233 - International Marketing

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BRILLIANT'S Export Management 235

and in case there is any discrepancy, the same should be brought to the
notice of advising bank.
4. Shipment of Goods: The exporter fulfills the shipping and cus-
toms procedure and collects the required documents from various authori-
ties for negotiation.
5. Negotiation of Documents: The exporters submit the required
documents to the negotiating bank, which scrutinizes the documents and
makes payment to the exporter.
6. Re-imbursement of Payment: The negotiating bank gets the
payment reimbursed from the issuing bank.
7. Documents to Importer: The documents forwarded to the issuing
bank by the negotiating bank are handed over to the importer and the
amount is debited to his account.
1. Sale Contract
Buyer Seller
(Importer) (Exporter)
5. Deliver Goods

2. Request for Credit 8. Documents & Claim for Payment 6. Present Documents 4. Deliver Letter of Credit

Importer's Bank 7. Present Documents Exporter's Bank
(Issuing Bank) (Advising Bank)
3. Send Credit
Fig.: Documentary Credit Procedure

Types of Letter of Credit
Basically, the letter of credit is either revocable or irrevocable. There-
fore, all credits should clearly indicate whether they are revocable or irre-
vocable. In the absence of such indications, the credit shall be deemed to
be irrevocable. Letters of credit may be divided into following categories:
(A) According to the degrees of security provided
(B) According to the payment methods
(C) Special types of credit provided