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What is the difference between back to back letter of credit and transfer letter of credit?
Wiki User
∙ 13y ago
back to back credit is a seller financing tool where seller goes to his bank for amendment of the master lc and get issued another lc in favor of the main supplier and also it is a LC where main buyer does not get to know that who is main supplier .
Bank which issues the back to back LC undertakes a definite payment obligation under L/C law and practice, while the bank that transfers a transferable L/C does not obligate to pay. Instead, the transferring bank usually pays after receipt of issuing bank's payment under the transferable credit.
a transerable is cannot be transferred until or unless it is mentioned in the master LC as tranferable.
Wiki User
∙ 13y ago
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