What does SBLC mean in terms of international trading?

already exists.

Would you like to merge this question into it?

already exists as an alternate of this question.

Would you like to make it the primary and merge this question into it?

exists and is an alternate of .

SBLC stands for 'stand by letter of credit'. The standby letter of credit serves a different function than the commercial letter of credit. The commercial letter of credit is the primary payment mechanism for a transaction. The standby letter of credit serves as a secondary payment mechanism. A bank will issue a standby letter of credit on behalf of a customer to provide assurances of his ability to perform under the terms of a contract between him and the beneficiary. The parties involved with the transaction do not expect that the letter of credit will ever be drawn upon.

The standby letter of credit assures the beneficiary of the performance of the customer's obligation. The beneficiary is able to draw under the credit by presenting a draft, copies of invoices, with evidence that the customer has not performed his obligation. The bank is obligated to make payment if the documents presented comply with the terms of the letter of credit.

Standby letters of credit are issued by banks to stand behind monetary obligations, to insure the refund of advance payment, to support performance and bid obligations, and to insure the completion of a sales contract. The credit has an expiration date.

The standby letter of credit is often used to guarantee performance or to strengthen the credit worthiness of a customer. In the above example, the letter of credit is issued by the bank and held by the supplier. The customer is provided open account terms. If payments are made in accordance with the suppliers' terms, the letter of credit would not be drawn on. The seller pursues the customer for payment directly. If the customer is unable to pay, the seller presents a draft and copies of invoices to the bank for payment.

The domestic standby letter of credit is governed by the Uniform Commercial Code. Under these provisions, the bank is given until the close of the third banking day after receipt of the documents to honor the draft.
7 people found this useful

Who is SBLC?

SBLC (Standby Letter of Credit) A Commercial Letter of Credit is taken as Guarantee to be used in payment of goods and services. The Standby Letter of Credit issued is tak

What do RDlc in terms of international trading mean?

RDl/c means REVOLVING DOCUMENTARY LETTER of CREDIT - it is banking instrument & it usual payment term in Int' trading when we speaking for yearly contracts. in this case e

What do FCO and ICPO in terms of international trading mean?

FULL CORPORATE OFFER TO: I, _______________________________, with full legal and corporate responsibility, and under penalty of perjury, with full knowledge of the act of

What do FCO in terms of international trading mean?

fco in international trading is: F ull C orporate O ffer . This is the final, detailed, specific offer that the seller is sending to the buyer. Doron Tamir, Ad
In Uncategorized

What is the international term for currency trading?

The international term for currency trading is called foreign exchange. Foreign exchange rates are updated around the clock based on currency values that fluctuate all the ti