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Letter of Credit

A letter of credit is a letter issued by a bank at the request of an importer wherein the bank agrees to pay the draft drawn by the exporter. This guarantees payment for exporters and acts as a substitute for bank credit. Letters of credit facilitate international commercial transactions by ensuring payment if document requirements are met, providing security for importers and exporters, and allowing them to obtain financing from banks. They benefit trade by expediting payment processes and guaranteeing the completeness of required documents between parties.

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Carlos Karmun
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378 views

Letter of Credit

A letter of credit is a letter issued by a bank at the request of an importer wherein the bank agrees to pay the draft drawn by the exporter. This guarantees payment for exporters and acts as a substitute for bank credit. Letters of credit facilitate international commercial transactions by ensuring payment if document requirements are met, providing security for importers and exporters, and allowing them to obtain financing from banks. They benefit trade by expediting payment processes and guaranteeing the completeness of required documents between parties.

Uploaded by

Carlos Karmun
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Letter of Credit

What is meant by a letter of credit is a letter issued by the Bank at the request of the buyer of the
goods (importer) where the Bank approves and pays the draft drawn by the seller of the goods
(exporter). Thus the letter of credit is a substitute tool for bank credit and can guarantee payment
for exporters.

excess of Letter of Credit


1. Payment guarantee to exporters
2. After all documents in accordance with the L / C requirements are submitted, the exporter
will immediately receive payment from the bank
3. L / C can be used by exporters for further payments
4. L / C does not require importers to provide full funds
5. Importers can use document ownership rights based on L / C to obtain further financing
6. Guarantee against importers, where the bank will refuse payment to the exporter if the
exporter does not meet the L / C requirements

Lack of Letter of Credit


1. There is no guarantee to the importer that the ordered goods will be in accordance with
the goods being shipped
2. It takes time to process the required papers through the bank
3. There are several bank fees that must be paid by the importer
4. Banks are only involved in matters involving documents, whereas for other matters, banks
are not responsible.

Letters of Credit (L / C) Function


1. Assist banks in providing financing facilities to importers
2. Providing convenience and security for the parties involved in the transaction
3. Ensure the payment is carried out as long as the requirements of the L / C are fulfilled
4. It is a requirement based only on documents and not on merchandise
5. Is a bank agreement in completing international commercial transactions

Benefits of Letter of Credit (L / C)


1. Facilitate the process of payment transactions between parties who do not know each other
2. As a certainty / payment security to avoid the risks provided by the importer
3. Guarantee the completeness of the required documents
4. Allows exporters and importers to obtain credit from banks
Surat kredit
Yang dimaksud dengan letter of credit adalah surat yang diterbitkan oleh Bank atas permintaan
pembeli barang (importir) di mana Bank menyetujui dan membayar draft yang ditarik oleh
penjual barang (eksportir). Dengan demikian letter of credit adalah alat pengganti untuk kredit
bank dan dapat menjamin pembayaran untuk eksportir.

kelebihan Letter of Credit


1. Jaminan pembayaran kepada eksportir
2. Setelah semua dokumen sesuai dengan persyaratan L / C diajukan, eksportir akan segera
menerima pembayaran dari bank
3. L / C dapat digunakan oleh eksportir untuk pembayaran lebih lanjut
4. L / C tidak mengharuskan importir untuk menyediakan dana penuh
5. Importir dapat menggunakan hak kepemilikan dokumen berdasarkan L / C untuk
mendapatkan pembiayaan lebih lanjut
6. Jaminan terhadap importir, di mana bank akan menolak pembayaran kepada eksportir
jika eksportir tidak memenuhi persyaratan L / C

Kurangnya Letter of Credit


1. Tidak ada jaminan kepada importir bahwa barang yang dipesan akan sesuai dengan
barang yang dikirim
2. Butuh waktu untuk memproses surat-surat yang diperlukan melalui bank
3. Ada beberapa biaya bank yang harus dibayar oleh importir
4. Bank hanya terlibat dalam hal-hal yang melibatkan dokumen, sedangkan untuk hal lain,
bank tidak bertanggung jawab.

Fungsi Letters of Credit (L / C)


1. Membantu bank dalam menyediakan fasilitas pembiayaan kepada importir
2. Memberikan kemudahan dan keamanan bagi para pihak yang terlibat dalam transaksi
3. Pastikan pembayaran dilakukan selama persyaratan L / C terpenuhi
4. Ini adalah persyaratan hanya berdasarkan dokumen dan bukan pada barang dagangan
5. Merupakan perjanjian bank dalam menyelesaikan transaksi komersial internasional

Manfaat Letter of Credit (L / C)


1. Mempermudah proses transaksi pembayaran antar pihak yang tidak saling kenal
2. Sebagai kepastian / pembayaran keamanan untuk menghindari risiko yang diberikan
oleh importir
3. Menjamin kelengkapan dokumen yang diperlukan
4. Memungkinkan eksportir dan importir untuk mendapatkan kredit dari bank

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