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what is the meaning of LETTER OF CREDIT?
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Answer Posted / jakkasureshkumar
A document issued by a financial institution on behalf of a
buyer stating the amount of credit the buyer has available,
and that the institution will honor drafts up to that
amount written by the buyer. It gives the buyer the
prestige and financial backing of the issuing institution
and satisfies the requirements of the seller in completing
the transaction. The accepting institution has a prior
agreement as to how the buyer will pay for the drafts as
they are presented.
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