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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.
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What does it mean to be a pig in trading?
staying too long in a trade after it is working.
What is equity trading and commodities trading?
Equity means shareholder ownership of the company. Equity is simply another partner of the company who can look over all the sectors of the company. He is a decision maker. Commodities mean products that are bought and sold. Commodities trading products are the main things. in Equity trading, you have the percentage of profit.
What do you mean by clearance in banking terms?
what do you mean by clearance in banking
What does FOR mean in shipping terms?
FOR? or do you mean FOB?
What does APR mean?
The adjective 'apre' may mean harsh, in terms of a voice. Or it may mean fierce, in terms of a fight. Or it also may mean bitter, in terms of cold and wind, discussions, and fruits and taste.
What do RWA in terms of international oil trading mean?
What does RWA mean in the oil trading business
What does CPT mean in terms of international trading?
carriage paid to
What do spa in terms of international trading mean?
Sales and Purchase Agreement,
What do RWA and POF in terms of international trading mean?
RWA = ready, willing and able POF = Proof of funds
What do FCO in terms of international trading mean?
fco in international trading is:Full Corporate Offer .This is the final, detailed, specific offer that the seller is sending to the buyer.Doron Tamir, Advocate.http://law.tamir.co.il/?cf=wikians
What do POP and POF in terms of international trading mean?
POF stands for proof of fund that is used for collateral or securities. It proofs that one has fund to maintain any cost.
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 each month shipment-loading has the same value.
What does FIB mean in terms of international gold trading?
In the context of international gold trading, FIB stands for "First In, Best" or "First In, Best Dressed." It refers to a trading principle where the first buyer or seller to make a trade has priority over subsequent transactions. This can impact pricing and availability, as it incentivizes timely execution in the fast-paced gold market. Understanding FIB dynamics can help traders optimize their positions and strategies.
What do LOI in terms of international trading mean?
LOI in international trading refers to a "Letter of Intent." It is a document that outlines the preliminary understanding between parties intending to enter into a business agreement, such as a trade transaction. An LOI typically details the terms and conditions of the proposed deal but is generally non-binding, serving as a basis for further negotiations and formal contract development. It helps establish a mutual commitment and clarifies intentions before finalizing a contract.
What does CIS mean in shipping terms?
CIS: Chinese International Shipping
What does the term PB in international trading mean?
Performance bond A surety bond between two parties, insuring one party against loss if the terms of a contract are not fulfilled. Usually part of a construction contract or supply agreement.
What do PFI in terms of international trading mean?
PFI, or "Price, Freight, and Insurance," refers to an international trading term indicating that the seller is responsible for the cost of goods, transportation, and insurance until the goods reach the buyer's destination. This term ensures that the buyer is not liable for these expenses until the goods are delivered, providing a level of security in the transaction. PFI is often used in contracts to clarify responsibilities and risks associated with shipping goods internationally.
