Now You Know L/C (Letter of Credit) Operation Chart
Saturday 2 June 2018
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L/C (Letter of Credit) Operation Chart
Muhammad Rahat
Dept. of Knitwear Manufacturing Technology
BGMEA University of Fashion & Technology (BUFT)
Email: smrahatsaif@gmail.com
![](https://4.bp.blogspot.com/-GMmLSBbVdV0/VwpEVIOFaHI/AAAAAAAAcn4/MOXIvQiT1ZcGlRqTjXUQC2UeFAxMNfBCg/s1600/rahat.jpg)
Muhammad Rahat
Dept. of Knitwear Manufacturing Technology
BGMEA University of Fashion & Technology (BUFT)
Email: smrahatsaif@gmail.com
L/C means Letter of Credit. It is one of the most used words in garment merchandising sector. L/C plays an important role both buyer and seller. Generally L/C is used for international sales transactions. L/C deals only in documents but not goods. An apparel merchandiser should have clear concept on LC. If you see the following picture carefully then you can learn how to operate L/C in apparel exporting business.
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Fig: Operation chart of L/C |
- Exporter ↔ Importer: Negotiation.
- Importer → Importer Bank: Import license, L/C
- Exporter: Commodity
- Importer Bank → Exporter Bank: L/C
- Exporter Bank → Exporter: L/C
- Exporter ↔ Trade department, inspection, custom, insurance. Shipper: License, Documents.
- Exporter: Shipping
- Exporter → Exporter Bank: Documents
- Exporter Bank → Exporter: Payment
- Exporter Bank → Importer Bank: Documents
- Importer Bank → Exporter Bank: Payment
- Importer Bank → Importer: Notification
- Importer → Importer Bank: Payment
- Importer Bank → Importer: Documents
- Importer → Customs: Claiming.