Page 234 - International Marketing

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236 International Marketing BRILLIANT'S

(A) According to The Degrees of Security Provided
1. Revocable Letter of Credit: A credit
period can be amended or cancelled by the Types of Letter of Credit
issuing bank at any moment of without prior (A)According to the
notice to the beneficiary. This does not con- Degrees of Security
stitute a legal binding between the banks Provided
concerned. 1. Revocable Letter of
2. Irrevocable Letter of Credit: An Ir- Credit
revocable L/C constitutes a definite under 2. Irrevocable Letter of
taking of the issuing bank for the payment of Credit
the bills drawn under it, provided the benefi- 3. Confirmed Letter of
ciary presents the stipulated documents to Credit
the credit nominated bank or to the issuing 4. With Recourse and
bank of complies with all the conditions of Without Recourse
the credit. This type of credit can neither be Letter Credit
modified nor cancelled without prior approval (B)According to the
to the beneficiary concerned. payment methods
3. Confirmed Letter of Credit: When 1. Sight Credits
an issuing bank authorizes requests another 2. Acceptance Credit
bank to confirm its irrevocable credit and the 3. Deferred Payment
letter has added its confirmation, then such Letter of Credit
a confirmation constitutes a definite under- (C)Special types of
taking of the confirming bank to pay against credit provided
presentation of proper documents. 1. Transferable Credit
4. With Recourse and Without Re- 2. Back to Back Credit
course Letter Credit: In case of ‘With Re- 3. Anticipatory Letter of
course’ letter credit if the buyer fails to pay Credit (Red clause and
the bank after the specified period the bank Green Clause)
can have recourse on the exporter. There is 4. Revolving Letter of
no such provision in ‘Without Recourse’ let- Credit
ter of credit. 5. Transit Credit
(B) According to Payment Methods 6. Credit Available By
1. Sight Credits: The beneficiary Installment
receives the proceeds of the credit upon 7. Restricted and
presentation and examination of the Unrestricted Credit
documents. There is a step-by-step process
of documents against payment, whereby the bank to be given reasonable
time, not to exceed seven banking days following the day of the receipt of
the documents, to examine the documents. Thus, it provides for payment
to be made to the beneficiary almost immediately after presentation of the