The Straight Letter of Credit serves as a crucial trade finance instrument in international commerce, particularly relevant under Indian banking and trade regulations. It is commonly used when businesses need a secure payment method in international trade transactions. The document, governed by Indian law and international banking practices (UCP 600), provides a formal commitment from a bank to pay the seller upon presentation of specified documents that comply with the LC terms. A Straight Letter of Credit is non-transferable and typically requires direct presentation of documents by the named beneficiary. The document includes essential details such as credit amount, expiry date, required documents, shipping terms, and goods description. It's particularly important in the Indian context due to the country's significant international trade volume and strict foreign exchange regulations under FEMA and RBI guidelines.
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1. Letter of Credit Number and Date: Unique LC identification number and issuance date
2. Issuing Bank Details: Complete name and address of the issuing bank
3. Beneficiary Details: Full name and address of the beneficiary (seller/exporter)
4. Applicant Details: Full name and address of the applicant (buyer/importer)
5. Currency and Amount: Currency denomination and amount of the LC in both figures and words
6. Expiry Date and Place: Final date and location for presentation of documents
7. Available With/By: Specification of where and how the credit is available (payment, acceptance, or negotiation)
8. Partial Shipments/Transhipment: Whether partial shipments or transhipment is allowed or prohibited
9. Documents Required: Detailed list of documents required for presentation
10. Goods Description: Brief description of goods/services being traded
11. Shipment Terms: Latest shipment date and shipping terms (Incoterms)
12. Special Conditions: Any specific conditions or requirements for the LC
1. Confirmation Instructions: Used when confirmation from another bank is requested
2. Transfer Conditions: Include when the LC needs to be transferable
3. Deferred Payment Terms: Required when payment is to be made at a future date after document presentation
4. Red Clause Provisions: Include when advance payment to beneficiary is permitted
5. Back-to-Back Provisions: Used when the LC supports a back-to-back LC arrangement
6. Insurance Instructions: Additional insurance requirements beyond standard coverage
1. Commercial Invoice Template: Standard format for the commercial invoice required under the LC
2. Shipping Documents Checklist: Detailed checklist of all required shipping and transport documents
3. Inspection Certificate Requirements: Specific requirements for inspection certificates if required
4. Bank Draft Format: Standard format for drafts to be drawn under the LC
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
International Trade
Manufacturing
Import/Export
Logistics and Supply Chain
Retail
Commodities Trading
Agriculture
Textiles
Automotive
Electronics
Pharmaceuticals
Heavy Industries
Mining
Relevant Teams
Finance
International Trade
Treasury
Compliance
Legal
Banking Operations
Risk Management
Procurement
Supply Chain
Business Development
Relevant Roles
Trade Finance Manager
Import Manager
Export Manager
Banking Relationship Manager
Chief Financial Officer
Finance Director
Treasury Manager
Compliance Officer
International Trade Specialist
Supply Chain Manager
Procurement Manager
Banking Operations Manager
Documentary Credits Specialist
International Business Development Manager
Risk Manager
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