An ILOC is a means of facilitating a transaction between a buyer and seller with the assistance of their respective banks. The buyer requests an ILOC from his bank, which is then sent to the seller's bank.
In addition to providing credit risk protection,
a letter of credit typically also specifies important details of the transaction, such as
•price,
•payment terms,
•time
•place for delivery of goods.
In the event the buyer fails to make payment as agreed, the buyer's bank makes payment to the seller's bank, which in turn renders payment to the seller, the beneficiary of the ILOC.
An ILOC is a means of facilitating a transaction between a buyer and seller with the assistance of their respective banks. The buyer requests an ILOC from his bank, which is then sent to the seller's bank. In addition to providing credit risk protection, a letter of credit typically also specifies important details of the transaction, such as•price,•payment terms,•time•place for delivery of goods. In the event the buyer fails to make payment as agreed, the buyer's bank makes payment to the seller's bank, which in turn renders payment to the seller, the beneficiary of the ILOC.
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