Difference between lc & bc

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CA Vibhuti Gadhiya

CA Vibhuti Gadhiya (Querist)
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07 January 2014 What is the difference betwwen Letter of Credit & Buyer's Credit

P V Ram

P V Ram (Expert)
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07 January 2014 Letter of credit is an assurance given by a banker on behalf of its customer to another banker (of the party) / party indicating that amount would be paid to the banker (of the party) / party upon fulfilment of the conditions as per the terms of lc. This is a non fund based transaction.

Buyer's credit is a short term credit availed by an importer from an overseas bank or financial institution for making payment to the seller. This is a fund based transaction.

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