Unit 4 DB

Unit 4 DB

Answer 1)

Letter of credit is basically a bond that assures the payment of imports to the exporter. Like everything it also possesses some advantages and disadvantages which have been discussed below. Advantages to the importer include he has an assurance that the exporter will only be paid if all the conditions are met as laid down in the letter of credit. Moreover he is able to negotiate more favorably with the exporter. The greater disadvantage to the importer is that the letter of credit does not assure the material or the stock that has to be delivered ...