Letter of Credit – LC Facility in UAE- Trade Finance

A Letter of Credit is a written undertaking by a Bank issued at the request of an applicant (Importer) to pay a fixed sum of money at a specific date to a specific party (Beneficiary/Exporter) subject to the receipt of specified commercial and/or financial documents listed in the Letter Of Credit.

The Bank almost always issues Irrevocable Letters of Credit, the terms of which cannot be amended after issuance until the beneficiary, the applicant and the Bank agree to the changes. UAE Banks issues LCs in accordance with Uniform Customs and Practices for Documentary Credit Publication No 500 of the International Chamber of Commerce.