Lc amendment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 November 2013 Dear Sir/ Madam

I received Inland Letter of credit from My customer in the month of May-2013 Expiring month is June-2014. I submitted BOE against LC and received payment from the customer. we covered almost the limit of the LC, and now customer is saying that continue with LC they will extend the amount of the LC and we can claim against the same LC.
So my question is this is it possible or according to rule that we can extend the same LC amount which already in used. If yes please tell me how if not than please give the valid reason.

I am waiting for reply.

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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08 November 2013 the expired time period of LC is june 2014, & u have received all the payment, what will reply post to YOUR BANKER AND RBI in this regards?

Querist : Anonymous

Querist : Anonymous (Querist)

08 November 2013 till i did not talk to my banker in this regards, i just to know is it possible or not if yes than how.

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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02 August 2024 Yes, it is possible to amend a Letter of Credit (LC) to extend its amount or validity, even if part of the LC has already been used. Here’s a detailed explanation of how this works and the steps involved:

### **Understanding LC Amendments**

1. **Types of Amendments:**
- **Extension of Validity:** If the LC is expiring soon and you need more time, you can request an extension of the LC’s validity.
- **Increase in Amount:** If the existing LC amount has been partially utilized and you need additional funds under the same LC, you can request an increase in the LC amount.

2. **Process to Amend an LC:**

**a. Request for Amendment:**
- The first step is to request the amendment from the customer. This is usually done through a formal letter or communication specifying the desired changes, including the new amount and/or validity period.

**b. Customer’s Consent:**
- The customer must agree to the amendment. The customer’s bank will need to approve the changes and communicate these to your bank.

**c. Submit Amendment Request to Your Bank:**
- Once you have the customer’s consent, you need to submit a formal request for the amendment to your bank. Provide all the necessary details and documentation regarding the amendment.

**d. Amendment Processing:**
- Your bank will process the amendment request and notify the issuing bank (the customer’s bank). The issuing bank will then make the changes to the LC and send the amended LC to your bank.

**e. Confirm Receipt:**
- Once the amendment is processed, ensure that you receive the amended LC from your bank and verify that all details are correct.

3. **Possible Reasons for Amendment:**
- **Extended Delivery Time:** Sometimes the delivery time needs to be extended due to unforeseen delays.
- **Increased Order Quantity:** The buyer might increase the order quantity, requiring an increase in the LC amount.
- **Adjustment in Terms:** Changes in the terms of the LC based on mutual agreement.

### **Important Considerations:**

- **Documentary Compliance:** Ensure that the documentary requirements are updated in line with the amended LC. This includes any shipping documents or compliance certificates.

- **LC Charges:** Be aware that amending an LC may incur additional charges, which could be borne by either party as per the agreement.

- **Bank Policies:** Each bank may have specific procedures and policies regarding LC amendments. It is crucial to communicate with your bank to understand their requirements and process.

- **Legal and Contractual Implications:** Review the terms of the original LC and any contractual obligations with the customer to ensure that the amendment does not breach any agreements.

### **Steps to Follow:**

1. **Communicate with the Customer:**
- Obtain written confirmation from the customer about the amendment.

2. **Submit Amendment Request:**
- Provide a formal request to your bank, detailing the amendment requirements.

3. **Receive and Verify Amended LC:**
- Ensure the amended LC meets all agreed-upon terms and conditions.

4. **Continue Trade Transactions:**
- Proceed with the trade transactions under the amended LC.

### **Summary:**
Yes, you can extend the LC amount and/or validity if the customer agrees and the necessary procedures are followed. The process involves formal requests and communication between all parties involved, including both banks and the customer. Always ensure compliance with the terms of the original and amended LC and verify all details once the amendment is processed.