What is Letter of Credit and explain other modes of payment in international Business.

Explanation

A Letter of Credit is a written undertaking by the Importer's bank, known as the issuing bank, on behalf of the Importer, promising to effect payment in favour of the exporter up to a stated sum of money, within a prescribed time limit and against stipulated documents.



The main international payment methods used around the world today include:


Cash in Advance

Letters of Credit

Documentary Collections

Open Account

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