Page 235 - International Marketing

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BRILLIANT'S Export Management 237

stipulated documents and on the condition that the terms of the credit
have been complied with.
2. Acceptance Credit: An Acceptance Credit stipulates that the
beneficiary must draw a bills of exchange for a particular tender, Example:
60, 90, 120 days sight and that the drafts will be accepted by one of the
following parties i.e.
The Applicant
The Negotiating bank
The Advising bank
But these credits are regarded as unsecured credits.
3. Deferred Payment Letter of Credit: In this sort of credit the
exporter supplies PL and M/C capital goods etc. on deferred payment
terms to an importer and no draft is drawn and payment by the opening
bank is determined in account with the terms laid down in the credit.
(C) Special Types of Credits
1. Transferable Credit: Under transferable L/C the beneficiary is
entitled to request the payment accepting negotiating bank to pay and
accepts negotiated bills lindered by 1 or more other parties.
2. Back to Back Credit: When the exporter uses his export letter
credit as a cover for opening a credit in favour of the local suppliers, their
credit is called back-to-back credit.
3. Anticipatory letter of credit (Red clause and Green Clause):
The anticipatory credit provides for advance payment or at least part pay-
ment to the beneficiary against his undertaking to effect the shipment. It
submits the bill and / or documents in terms of credit within the validity.
4. Revolving Letter of Credit: In a revolving credit amount of draw-
ing is reinstated and made available to the beneficiary again after a period
of time on the advice of payment by the applicant or merely the fact that
shipment has been made.
5. Transit Credit: It is issued in one foreign country with the benefi-
ciary in another but it is advised through and usually confirmed by a bank
in London.
6. Credit Available By Installment: This credit specifies shipments
and or drawings by installment stipulating specific period for each install-
ment of shipment and or drawings. In case any installment of shipment is
missed, credit will not be available for that and the subsequent install-
ments except when credit permit such lapse.
7. Restricted and Unrestricted Credit: Credit which do not specify
any particular bank who is authorized to negotiate etc. is termed as unre-