Banking is an integral part of international businesses, where Trade Finance is one of the most lucrative businesses to any bank. Trade finance includes various kinds of loans, advances and facilities required for imports and exports deals that are made on foreign trade, and involve foreign exchange transactions. Letters of credit (LC) are most often used in international trade, governed by the Uniform Customs and Practice for Documentary Credits (or UCP), the rules of the International Chamber of Commerce. As we know that a letter of credit is a document issued by a third party that guarantees payment for goods or services when the seller provides acceptable documentation. Letters of credit are usually issued by banks or other financial institutions.
Letter of Credit (LC), as we know it, is one of the major lines of business of commercial banks. Employees working in the bank must have a comprehensive knowledge of this product for minimizing the risk involved, facilitating the customers, providing relevant and true information to the customers and also doing necessary operating activities for conducting various LC related activities.
