Documentary Letter of Credit

Documentary Letter of Credit is an assurance provided by a bank or trade finance institutions to ensure the importer/buyer, that they receive the goods under the terms and conditions as initially set out and payment to the supplier as pre-agreed. It is ideal for meeting short-term needs and for new business relationships. The bank or the financial institution will act as an intermediator ensuring both parties terms specified in the DLC are completely fulfilled to receive the payment. In an event of when the buyer is unable to pay after the terms specified in the DLC are fulfilled, seller/exporter can make a compliant document presentation demanding payment, to which the bank or financial institution is obligated to pay.