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Bill of exchange is an old fashion method of debt settlement, paper based and is not authenticated. LC is a new method which is based on SWIFT MT700 and is bank to bank authentication of a debt settlement in trade.
LC, by default, is bank to bank sponsorship but Bill of exchange, by default is not a banking instrument. however, bank may be involved in its parties or not.
Bill of exchange , solely cannot be used in trade unless this is accepted by buyer's bank which is called documentary collection. also , along with LC , some banks use Bill of exchange as a supporting and cheaper method of guarantee.
Recently, there is a new version of Bill of exchange, named Billex , offered by Billex trade finance corp in Canada and Singapore, which has an online reporting system and verification possibility to compensate for lack of authenticity of Bill of exchange. some banks are using it and some see it as a thread to their LC business . Billex is cheap and LC is expensive... I guess it will grow very fast in the market.
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What is RDLC one type of letter of credit?
Revolving Documentary Letter of Credit
How do you explain the working of Letter of Credit?
Explain the significance of letter of credit in international marketing?
What is the journal entry to record letter of credit?
I received letter of credit from my customer how i have to enter my entries
What is a divisible letter of credit?
Never heard of it. Perhaps it's a mistranslation of "transferable letter of credit"- which is a letter of credit in which the whole or part of the payment can be transferred from the payee to a 3rd party.
Is letter of credit a financial instrument?
A letter of credit is a financial instrument. It should be treated as such and guarded like you would a credit or debit card.
Difference between banker's acceptance and letter of credit?
differecences between banker's acceptance and letter of credit
What is the difference between a letter of credit and a supercedeas bond?
is a letter of credit considered the same as a supercedeas bond?
What is the difference between a Bank guarantee and standby letter of credit?
nothing
Difference between buyers credit and letter of credit?
Buyer's credit is extended to finance the purchase of goods or services. A letter of credit guarantees that a payment will be received. If the buyer doesn't make a payment, the bank has to pay.
What is the difference between letter of credit letter of guarantee?
Both Letter of Credit and Letter of Guarantee are commitment to payment by the issuer of the instrument (generally a Bank). In letter of credit, the issuer has to fulfill his commitment on fulfilling the terms and conditions of the letter of credit by the beneficiary. Whereas, on the other hand, in letter of guarantee the issuer has to make payment, when the beneficiary is unable to fulfill the terms & conditions of the letter of guarantee.
Buyers credit - Letter of credit?
A red clause letter of credit is similar to a letter of Credit which is written to state or confirm the availability of funds for a particular transaction between the seller and buyer. However, a clause is included in the letter stating that the stated amount or credit can be advanced immediately on showing the letter.
What is the difference between Almish and Amish?
The difference is a letter L.
What is the difference between letter of application and cover letter?
k,
What is the difference between a personal-business letter and a business letter?
What is letterhead
What is the difference between a sound and a letter?
a sound is sounded and a letter is written
What is the difference between a bond and a security?
A bond in this context is issued by a surety company and is a form of guarantee. Security can take the form of a cash deposit, an Irrevocable Letter of Credit or a surety bond.
Standby letter of credit?
The Standby letter of credit serves as a secondary payment mechanism. A bank will issue a standby letter of credit on behalf of a customer to provide assurance of his ability to perform under the terms of a contract between the beneficiary
