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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