► Export Letter of Credit
An export letter of credit refers to a foreign bank undertaking issued on behalf of foreign importer. The issuing bank specifies all the requirements of its customer in the letter of credit and undertakes to honor all drafts drawn in conformity to the credit terms and conditions.
► Import Letter of Credit
A letter of credit is a commitment by the bank to pay the seller of goods or services of a certain sum provided the seller presents the documents specified in the terms of the credit.