LETTER OF CREDIT Letter Of Credit is a document that abuyer can obtain from bank to give the confirmation to the

seller thatthe payment for goods will be made to the seller on time without any failure on the part of buyer. Basically, a letter of credit gives theseller an assurance that he will receive the payment for the goods. In order for the payment to occur, the seller has to present the bank with the necessaryshipping documentsconfirming the shipment of goods within a given time frame. It is often used ininternational trade to eliminaterisks such as unfamiliarity with the foreigncountry, customs, or political instability.