{"id":960,"date":"2026-01-19T20:06:58","date_gmt":"2026-01-19T20:06:58","guid":{"rendered":"https:\/\/sailorvikas.com\/?p=960"},"modified":"2026-01-19T20:06:58","modified_gmt":"2026-01-19T20:06:58","slug":"documentary-letter-of-credit","status":"publish","type":"post","link":"https:\/\/sailorvikas.com\/index.php\/2026\/01\/19\/documentary-letter-of-credit\/","title":{"rendered":"Documentary Letter of Credit"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\">Documentary Letter of Credit<\/h2>\n\n\n\n<p>The Documentary letter of credit is the most common method of payment in International trade. This is because:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It gives security to both the Buyer and Seller.<\/li>\n\n\n\n<li>It is safe.<\/li>\n\n\n\n<li>There are two types: the revocable and irrevocable letters of credit. The irrevocable letter of credit is the most common.<\/li>\n\n\n\n<li>The letter of credit procedure was drawn up by the International Chamber of Commerce.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><img fetchpriority=\"high\" decoding=\"async\" width=\"615\" height=\"431\" src=\"https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-59.jpeg\" alt=\"\" class=\"wp-image-961\" srcset=\"https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-59.jpeg 615w, https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-59-300x210.jpeg 300w\" sizes=\"(max-width: 615px) 100vw, 615px\" \/><\/figure>\n\n\n\n<p><strong>The Letter of Credit Procedure<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"615\" height=\"432\" src=\"https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-60.jpeg\" alt=\"\" class=\"wp-image-962\" srcset=\"https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-60.jpeg 615w, https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-60-300x211.jpeg 300w\" sizes=\"(max-width: 615px) 100vw, 615px\" \/><\/figure>\n\n\n\n<p><strong>The Letter of Credit Procedure<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"566\" height=\"780\" src=\"https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-62.jpeg\" alt=\"\" class=\"wp-image-963\" srcset=\"https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-62.jpeg 566w, https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-62-218x300.jpeg 218w\" sizes=\"(max-width: 566px) 100vw, 566px\" \/><\/figure>\n\n\n\n<p><strong>A Letter of Credit<\/strong><br>The procedure for the documentary letter of credit method is as below:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>A Sales Contract is signed between the Buyer and Seller.<\/li>\n\n\n\n<li>The Buyer opens a credit facility with his bank (Issuing or Buyer\u2019s Bank) for the sales price; this information is passed to the Seller via the Advising Bank (Seller\u2019s Bank).<\/li>\n\n\n\n<li>Once the Seller gets information that the Buyer has deposited money or is solvent, the goods are shipped. The goods shipped must conform to the specifications of the negotiated sales contract.<\/li>\n\n\n\n<li>The Seller\u2019s bank releases payment to the Seller provided all documents are in order. The documents provide evidence that the goods conform to the negotiated sales contract, are shipped in time and are not damaged at the time of shipment. Documents are passed to the Buyer\u2019s bank and the Seller\u2019s bank receives money from this bank as per agreed terms and conditions, provided all the necessary documents are in order.<\/li>\n<\/ol>\n\n\n\n<p>The documents that are required to be presented to the advising bank for payment are the following:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A sight draft for payment, drawn on the Seller\u2019s bank (the drawee).<\/li>\n\n\n\n<li>A certificate of insurance indicating where payment for loss\/damage to goods will be made. The cargo insurance policy must be taken before the shipment date.<\/li>\n\n\n\n<li>An invoice, specifying the sales contract and the shipping marks and number of the goods.<\/li>\n\n\n\n<li>A clean bill of lading.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"615\" height=\"433\" src=\"https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-61.jpeg\" alt=\"\" class=\"wp-image-964\" srcset=\"https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-61.jpeg 615w, https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-61-300x211.jpeg 300w\" sizes=\"(max-width: 615px) 100vw, 615px\" \/><\/figure>\n\n\n\n<p><strong>The Sight Draft<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"572\" height=\"787\" src=\"https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-63.jpeg\" alt=\"\" class=\"wp-image-965\" srcset=\"https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-63.jpeg 572w, https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-63-218x300.jpeg 218w\" sizes=\"(max-width: 572px) 100vw, 572px\" \/><\/figure>\n\n\n\n<p><strong>A Certificate of Insurance<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"569\" height=\"787\" src=\"https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-64.jpeg\" alt=\"\" class=\"wp-image-966\" srcset=\"https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-64.jpeg 569w, https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-64-217x300.jpeg 217w\" sizes=\"(max-width: 569px) 100vw, 569px\" \/><\/figure>\n\n\n\n<p><strong>An Invoice<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"568\" height=\"780\" src=\"https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-65.jpeg\" alt=\"\" class=\"wp-image-967\" srcset=\"https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-65.jpeg 568w, https:\/\/sailorvikas.com\/wp-content\/uploads\/2026\/01\/image-65-218x300.jpeg 218w\" sizes=\"(max-width: 568px) 100vw, 568px\" \/><\/figure>\n\n\n\n<p><strong>A Clean Bill of Lading<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Documentary Letter of Credit The Documentary letter of credit is the most common method of payment in International trade. This is because: The Letter of Credit Procedure The Letter of Credit Procedure A Letter of CreditThe procedure for the documentary letter of credit method is as below: The documents that are required to be presented [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ocean_post_layout":"","ocean_both_sidebars_style":"","ocean_both_sidebars_content_width":0,"ocean_both_sidebars_sidebars_width":0,"ocean_sidebar":"","ocean_second_sidebar":"","ocean_disable_margins":"enable","ocean_add_body_class":"","ocean_shortcode_before_top_bar":"","ocean_shortcode_after_top_bar":"","ocean_shortcode_before_header":"","ocean_shortcode_after_header":"","ocean_has_shortcode":"","ocean_shortcode_after_title":"","ocean_shortcode_before_footer_widgets":"","ocean_shortcode_after_footer_widgets":"","ocean_shortcode_before_footer_bottom":"","ocean_shortcode_after_footer_bottom":"","ocean_display_top_bar":"default","ocean_display_header":"default","ocean_header_style":"","ocean_center_header_left_menu":"","ocean_custom_header_template":"","ocean_custom_logo":0,"ocean_custom_retina_logo":0,"ocean_custom_logo_max_width":0,"ocean_custom_logo_tablet_max_width":0,"ocean_custom_logo_mobile_max_width":0,"ocean_custom_logo_max_height":0,"ocean_custom_logo_tablet_max_height":0,"ocean_custom_logo_mobile_max_height":0,"ocean_header_custom_menu":"","ocean_menu_typo_font_family":"","ocean_menu_typo_font_subset":"","ocean_menu_typo_font_size":0,"ocean_menu_typo_font_size_tablet":0,"ocean_menu_typo_font_size_mobile":0,"ocean_menu_typo_font_size_unit":"px","ocean_menu_typo_font_weight":"","ocean_menu_typo_font_weight_tablet":"","ocean_menu_typo_font_weight_mobile":"","ocean_menu_typo_transform":"","ocean_menu_typo_transform_tablet":"","ocean_menu_typo_transform_mobile":"","ocean_menu_typo_line_height":0,"ocean_menu_typo_line_height_tablet":0,"ocean_menu_typo_line_height_mobile":0,"ocean_menu_typo_line_height_unit":"","ocean_menu_typo_spacing":0,"ocean_menu_typo_spacing_tablet":0,"ocean_menu_typo_spacing_mobile":0,"ocean_menu_typo_spacing_unit":"","ocean_menu_link_color":"","ocean_menu_link_color_hover":"","ocean_menu_link_color_active":"","ocean_menu_link_background":"","ocean_menu_link_hover_background":"","ocean_menu_link_active_background":"","ocean_menu_social_links_bg":"","ocean_menu_social_hover_links_bg":"","ocean_menu_social_links_color":"","ocean_menu_social_hover_links_color":"","ocean_disable_title":"default","ocean_disable_heading":"default","ocean_post_title":"","ocean_post_subheading":"","ocean_post_title_style":"","ocean_post_title_background_color":"","ocean_post_title_background":0,"ocean_post_title_bg_image_position":"","ocean_post_title_bg_image_attachment":"","ocean_post_title_bg_image_repeat":"","ocean_post_title_bg_image_size":"","ocean_post_title_height":0,"ocean_post_title_bg_overlay":0.5,"ocean_post_title_bg_overlay_color":"","ocean_disable_breadcrumbs":"default","ocean_breadcrumbs_color":"","ocean_breadcrumbs_separator_color":"","ocean_breadcrumbs_links_color":"","ocean_breadcrumbs_links_hover_color":"","ocean_display_footer_widgets":"default","ocean_display_footer_bottom":"default","ocean_custom_footer_template":"","ocean_post_oembed":"","ocean_post_self_hosted_media":"","ocean_post_video_embed":"","ocean_link_format":"","ocean_link_format_target":"self","ocean_quote_format":"","ocean_quote_format_link":"post","ocean_gallery_link_images":"on","ocean_gallery_id":[],"footnotes":""},"categories":[1],"tags":[],"class_list":["post-960","post","type-post","status-publish","format-standard","hentry","category-celestial-navigation","entry"],"_links":{"self":[{"href":"https:\/\/sailorvikas.com\/index.php\/wp-json\/wp\/v2\/posts\/960","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sailorvikas.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sailorvikas.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sailorvikas.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sailorvikas.com\/index.php\/wp-json\/wp\/v2\/comments?post=960"}],"version-history":[{"count":1,"href":"https:\/\/sailorvikas.com\/index.php\/wp-json\/wp\/v2\/posts\/960\/revisions"}],"predecessor-version":[{"id":968,"href":"https:\/\/sailorvikas.com\/index.php\/wp-json\/wp\/v2\/posts\/960\/revisions\/968"}],"wp:attachment":[{"href":"https:\/\/sailorvikas.com\/index.php\/wp-json\/wp\/v2\/media?parent=960"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sailorvikas.com\/index.php\/wp-json\/wp\/v2\/categories?post=960"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sailorvikas.com\/index.php\/wp-json\/wp\/v2\/tags?post=960"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}