Answers » Categories » Banking

What is a non-operative Revolving D Letter of Credit?

November 15, 2010


0
1 Report

1 Answer

0 
A non-operative revolving documentary letter of credit is a document of international commerce
against which payment is effected. It is an irrevocable undertaking by the issuer (e.g. a bank) to ensure that payment is made on an obligation. The risk of nonpayment by the buyer is handled by the credit of a bank.
At the same time, the seller is not paid until the documents presented evidence shipment of the goods.

Revolving letter of credit was developed for multiple shipments. Instead of arranging a new letter of credit for each shipment, the buyer opens a L/C that revolves, a fixed amount is available which is replenished when exhausted.

A L/C may also revolve in time, when an amount is available in fixed installments over a pre-defined period.

Answer this question

by Anonymous - Already have an account? Login now!
Your Name:  

Your Answer:  
Source(s): (optional)

Enter the text you see in the image below
What do you see?
Can't read the image? View a new one.
Your answer will appear after being approved.

Ask your own question