Advised Letter Of Credit
A letter of credit, also known as a LOC is the term of payment used for someone who works in the import-export business.
To complete the transaction the exporter needs to avail this LOC from a bank or financial institution from the country she or he is exporting to. The bank’s job is to advise to exporter about this transaction, whether he should negotiate, go ahead with the deal, add more clauses to the agreement etc.
The advising bank is also responsible for checking if the transaction is legitimate or not. The bank must verify the credentials of both parties involved in the transaction and go over the figures and other relevant details of the transaction.
The transaction can be carried forward only once the parties get heads up from the advisory bank or institution. All relevant details regarding both the parties must be clearly mentioned in the letter.
Advised Letter Of Credit – Sample
House No 8
Cano, Open Space-83636363
12th June 2017
Subject: Advised Letter of Credit
We hereby establish Mr. Harish Kumar Singh’s claim on INR 10,00,000 for conducting the transaction with Mr. Hajela. This transaction was conducted over the import-export of textiles from India to Nigeria. The textiles include products such as Cheras cotton and Black sway which being exported to Nigeria through 5 shipments of 60 cartons each.
As the sole financial advisory bank of this transaction, we have looked into the records of both parties. Their timely payments meet with their negotiation clauses. A sum of INR 2 CR was previously received by Mr. Singh from Mr. Hajela under our guidance only. Given the fact that both parties stick to their side of the bargain and carry out the transaction in as smooth a manner as possible, the bank has agreed to be the facilitator of yet another transaction between the two parties.
To further carry out the process we need a list of the following documents from both parties-
- Photocopy of previous LC’s issued for transactions about INR 1,00,000
- Business Visa copies of Mr. Singh
- Photo Identity Proof
- Initial Deposit of INR 2,00,000
- Person of contact from a bank of the resident countries.
- Bank Statements of the companies for the past 6 months.
- Account Number
- PAN Card for Indian Resident.
We also request a meeting with both the parties at our headquarters on Corporate office 6th Floor, A side on the 23rd June 2017 at 11 am. We will be discussing more details and setting timelines for the transactions as well.
In case of any doubts or questions, please feel free to reach out to the undersigned.