In our blog post, you can find the answer to the question How to Open an Letter of Credit. Letters of Credit In order to open it, the buyer, i.e. the importer, must apply to his own bank for the goods he will buy, opening a credit in favor of the seller. The bank that opens the credit guarantees the seller that it will pay the price of the goods if it complies with the credit terms. Thus, the first step is taken to open the credit.

There are four sides (at least) to the credit. These are possible to summarize in the form of a buyer, buyer's bank, seller's and seller's bank. It is possible for the sides to multiply further. For example, a further 3rd bank (Inspector Bank) will intervene in cases where the two banks have never had a business relationship before. With all four parties to the credit agreed upon, the credit will now begin to function.

Letter of Credit training for detailed information Please click here.

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Gökhan EROL
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