The letter of credit request must be duly filled out in legible handwriting, remembering the maximum date of shipment of the merchandise, if the Letter of Credit is "Confirmed" or "Not Confirmed", the company's account number, the description of the merchandise in Spanish and English, the maximum date of validity, type of Incoterms, additional conditions, the maximum date of presentation of documents.

Take into account that the Letter of Credit is built on the basis of the Purchase Order, the same that the Importer and Exporter have made.

Types of Documentary Credit-

Documentary Credits can be divided into different categories according to different criteria, they are:


Way to pay

Payment Commitment


Expanding information on the Criteria -

For its Revocability:

Irrevocable: They cannot be modified or canceled without the consent of all the parties involved: Originator (Importer), Issuing Bank (Importer's Side), Advising or Confirmed Bank (Exporter's Bank) and Beneficiary (Exporter) Take note ## the If irrevocable letter of credit constitutes for the issuing bank a commitment that it assumes on behalf of the importer or payer to pay, negotiate or accept letters as long as the terms and conditions given in the Documentary Credit ## are met.

By your Payment Method

  1. In Sight

Against documents; payment is made at the boxes of the Issuing Bank or Adviser / Confirmer upon presentation of shipping documents, provided that the agreed terms (dates, documents, instructions) have been fully met. With Advance Payment; payment is made totally or partially prior to shipment and against a simple receipt confirmed by the exporter and the written promise to return the money if the shipment is not made. (Green Clause)

  1. Term

Acceptance; Payment is made within a specified period, starting from a specific date (usually shipment) against presentation of the shipping documents and a letter or letters drawn on the Issuing Bank (Importer) or the Advising Bank (Exporter).)

Deferred Payment; Payment is made within a specified period, starting from a specific date, which is generally the date of shipment, in this case no letters are used, this method is more used by the Importer

  1. For the Payment Commitment

Advised, in the case the Advising Bank (Exporter) only notifies the Beneficiary (Exporter) of the issuance of the Documentary Letter of Credit in their favor, do not add any commitment only to carefully review the documents and verify the authenticity and conformity of the documents. credit documents.

Confirmed, it gives the exporter double payment security, in what way? Since when adding the confirmation, the Confirming Bank, usually the Advising Bank, assumes jointly with the Issuing Bank (Importing Bank) the commitment to pay or negotiate bills with a defined term against the presentation of shipping documents, provided that the terms and conditions are compliant. That is why properly reviewing the documents is vital in a negotiation with a Letter of Credit. If the Importing Bank fails in the payment, the Confirming Bank assumes the payment before the exporter.


  1. Revolving or Revolving Credit; It can be partially or totally renewed until the expiration period allows it (it can be in amount or in time). The important thing is that this type of credit avoids that the importer has to issue new letters of credit for each shipment, being more dynamic the documentary process and reducing its costs, avoiding the costs of issuing a letter of credit. It is the most suitable modality when making partial shipments.
  2. Transferable Credit; It is used when the exporter is not the manufacturer but only an intermediary, this modality at the request of the Beneficiary (Exporter), the Advising / Confirming Bank, can issue a national Letter of Credit in favor of a second beneficiary and for an amount less than that shown in the original Letter of Credit, the difference is the profit margin of the exporter, it is a way to avoid the producer from contacting the importer.
  3. Back-to-Back Credit, is when the Letter of Credit of which the exporter is the beneficiary is not transferable and it does not comply with the contract request, subcontracts to a supplier and offers its credit as a guarantee to the Advising Bank for the issuance of a second credit.
  4. Stand By Credit; It is an irrevocable commitment that the Bank assumes on behalf of the payer (importer) to pay a certain sum to a Beneficiary, if the terms of the letter of credit are not fulfilled, it is generally used as a bank guarantee to support commercial credits and financial public tenders or tenders.

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