Discounting of Letter of Credit (LC) is a short-term credit facility provided by the bank. LC discounting is actually a term used for ease in place of ‘LC Bill Discounting’, which means discounting of a bill backed by LC. In this arrangement, the sale of goods is made by the client on the strength of usage of the term 'Export Letter of Credit (LC).' Sellers may request that a buyer obtain a letter of credit from a financial institution prior to shipping goods. This is done to protect the seller against non Payment and the merchandise.
FEATURES AND BENEFITS
- No Pre-Payment penalty.
- Eligibility on projected Turnover.
- No vintage required (Age of the firm can be less than 1 year).
- No interest charged.
- Only opening charges applicable.
- Can also be in Foreign Currency.
- No Collateral Security required.