Inland Letter of Credit

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A documentary letter of credit provides an irrevocable undertaking by the issuing bank to pay the beneficiary for domestic supplies if documents presented comply with agreed terms. Use it to negotiate better commercial terms with suppliers within India.

Features & Benefits

Faster processing with digital initiation and templates

Negotiate better pricing and terms with assured payment support

Option to issue against sanctioned limits or fixed deposit

Status tracking from issuance to document presentation

How it works

Follow the step-by-step procedure to avail of Inland Letter of Credit

1

Buyer and Seller enter into contract and agree that payment will be made on the basis of LC.
2

Buyer approaches IDFC FIRST Bank (Issuing Bank) to issue LC in favour of Seller.
3

IDFC FIRST Bank issues LC which is advised through its branch or correspondent bank (Advising Bank).

4

Advising Bank advises LC to Seller.
5

Upon receipt of LC, Seller prepares shipment and delivers documents to Presenting Bank (which could also be your Advising Bank).
6

Presenting Bank dispatches documents to IDFC FIRST Bank for payment.

7

IDFC FIRST Bank pays Presenting Bank upon verifying that the documents are in order. Upon receipt of payment, Presenting Bank pays Seller.
8

The buyer pays the document amount to IDFC FIRST Bank.
9

IDFC FIRST Bank handover the documents to Buyer, who can now use them to obtain the goods.

Schedule of Charges

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Inland Letter of Credit