Definitions for "Letters of credit"
Bank guarantees to a client's overseas suppliers paid for purchase order funding.
A letter of credit is a guarantee of payment by a bank (issuing institution)to a third party for a specific amount of money, if certain conditions are met.
(Also known as "Documentary Credit"). A Letter of Credit is a conditional promise issued by a bank requiring the bank receiving it to pay a sum of money to a specified person or company upon fulfilment of the stipulated terms and conditions. See animation about "Letters of Credit" by clicking here.