Letter of credit is a written commitment from a bank guaranteeing that a buyer’s payment to the seller will be on time and full amount. If the buyer fails to keep its promise and is not in a position to pay the full amount, it is the liability of the guaranteeing bank to pay the committed amount to the seller on behalf of the buyer.
Letter of credit template is almost identical for all kinds of credit letter. The use of a letter of credit has become a very important aspect of international trade.Since a letter of credit is a negotiable instrument, the issuing bank pays the beneficiary. The format remains the same for all types of letter, just the content has to be different for every letter.
Table of Contents
Letter Of Credit Template Writing Tips
- These are formal types of letter hence professional language has to be used.
- While closing the letter thank the reader because this creates a very good impression on the one who reads.
- Use very polite language, proper enough to convince the person who is reading it.
- Mention the motive of the letter and the date of the expiry of the letter of credit. Also, write the reason for which the letter of credit is asked for.
Letter Of Credit Template Template
Use our free Letter of Credit Template to help you get started.
From,
_____________
_____________
_____________.
Date: ___________. (Date on which letter is written)
To,
____________
____________
____________.
Subject : ________________. (Main purpose of writing the letter)
Dear______________, (Madam/ Sir)
On behalf of ______________(name of the bank), I am pleased to inform you that we have issued this letter of credit by your name and the amount of the same is $80,000.The letter of credit is issued after taking into consideration your request to the bank and on the word that you will make the payment in a timely manner. The letter is valid till the date ______(date). After this date, the letter will be valid for next two years automatically.
This letter is dealt out in accordance with the Standard Customs and Practice for Documentary Credits, 2008 Version National Chamber of Commerce Publication No. 400. We are sure that you will follow the rules and regulations specified by the bank.
Thanking you.
Warm regards,
________________ . (Name and signature of the sender)
________________. (Name of the organization)
Sample Letter
From,
International Bank,
Andheri, Mumbai.
April 18, 2013.
To,
Santosh Gupta,
Bandra, Mumbai.
Subject: Issuing of Letter of Credit.
Dear Sir,
We have written this letter on behalf of International Bank to inform you that we have opened this letter of credit in your name for an amount of $80,000 (Eighty thousand dollar). This amount will be given as per your request for the reason of payment of your draft presentation. The letter is valid till 15.11.2013.This date will be extended by default for next two years.
This letter is issued according to the Standard Customs and Practice for Documentary Credits, 2008 Version National Chamber of Commerce Publication No. 400. We are sure that you will make the payment in time. We hope that you have read all the terms of conditions carefully and you agree to the completely. A copy regarding the terms and conditions and rules related to the account has been attached with the letter which covers almost all the queries which you may have in addition to this. If you still have any confusion/query, feel free to contact us anytime
Thanking you.
Warm regards,
Robin Adhikari,
Manager at International Bank,
Mumbai.
Email Format
The following is the email format to be followed for Letter of Credit.
From: name@email.com
To: name@email.com
Subject: ___________. (Main purpose of writing the mail)
Dear_______, (Sir/Madam)
We have written this letter on behalf of International Bank to inform you that we have opened this letter of credit in your name for an amount of $80,000 (Eighty thousand dollar). This amount will be given as per your request for the reason of payment of your draft presentation. The letter is valid till 15.11.2013.This date will be extended by default for next two years.
This letter is issued according to the Standard Customs and Practice for Documentary Credits, 2008 Version National Chamber of Commerce Publication No. 400. We are sure that you will make the payment in time. We hope that you have read all the terms of conditions carefully and you agree to the completely. A copy regarding the terms and conditions and rules related to the account has been attached with the letter which covers almost all the queries which you may have in addition to this. If you still have any confusion/query, feel free to contact us anytime.
Thanking you.
Your sincerely,
___________ (Name and signature of the sender)
___________ (Name of the organization)
Leave a Reply
You must be logged in to post a comment.