Letter of Credit - 3
Tenor: Sight LC, Acceptance LC, Deferred LC, Negotiation LC.
Sight LC – beneficiary get the payment on presentation of documents.
Acceptance LC (Usuance LC) – bill of exchange or drafts are drawn with certain Usuance period.
Deferred LC – it is similar to Usuance LC except no bill of exchange.
Negotiation LC – issuing bank undertakes to make payment to Negotiating Bank.
Back to Back LC – when an exporter arranges to issue an LC in favour of local suppliers to procure goods on strength of export LC received in his favour.