GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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bill of country
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letter of credit
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bill of exchange
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letter of exchange
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Detailed explanation-1: -A Letter of Credit is an arrangement whereby Bank acting at the request of a customer (Importer / Buyer), undertakes to pay for the goods / services, to a third party (Exporter / Beneficiary) by a given date, on documents being presented in compliance with the conditions laid down.
Detailed explanation-2: -Documentary collection is method of trade finance in which an exporter’s bank forwards documents to an importer’s bank and collects payment for shipped goods.
Detailed explanation-3: -A confirmed letter of credit involves a bank other than the issuing bank guaranteeing the letter of credit. The second bank is the confirming bank, typically the seller’s bank. The confirming bank ensures payment under the letter of credit if the holder and the issuing bank default.
Detailed explanation-4: -The Bank has a maximum of 5 banking days following the day of presentation to determine if a presentation is complying. (UCP 600 Article 14(b)).