📜 DOCUMENTARY CREDIT
US Capital Private Bank Knowledge Base
📖 What is a Documentary Credit?
A Documentary Credit is a letter of credit issued to support the movement of merchandise, where payment or acceptance is made upon presentation of specified shipping documents by the beneficiary to the issuing bank.
⚙️ Key Features
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The beneficiary (usually the exporter/seller) must present shipping documents that prove the goods have been shipped according to the terms.
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Payment or acceptance of the draft by the issuing bank is conditional on the documents presented matching the letter of credit’s terms.
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Protects both buyer and seller by ensuring payment only occurs after shipment confirmation.
💡 Purpose and Benefits
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Facilitates international trade by providing secure payment guarantees based on document compliance.
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Assures the buyer that payment will only be made if the agreed shipment documents are provided.
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Helps sellers secure payment by using the letter of credit as a guarantee.
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Reduces risks related to non-payment or shipment discrepancies.
⚠️ Considerations
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Strict compliance with documentary requirements is essential; discrepancies may delay or prevent payment.
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The issuing bank does not inspect goods but relies solely on the documents presented.
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Any errors or omissions in documents can cause payment delays or rejection.
🔄 Related Terms
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Letter of Credit (L/C) – A bank guarantee of payment upon compliance with documentary terms.
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Shipping Documents – Includes bills of lading, invoices, packing lists, certificates of origin, etc.
📞 Contact US Capital Private Bank
📧 Email: [email protected]
🌐 Website: https://uscapitalprivatebank.com