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Letter of credit (L.C or L/C): As the word emplies it is authorising letter proposed by financial firm in credit of the payer. Ex:- If a company naming ABC procures a product from a different company naming XYZ. Both of the company is not in good faith of each other. In this case or such a case mostly in case of abroad transaction, both the parties makig a letter of credit through the third party and fourth party i.e, the Financial firms. The financial firms comes into the picture and one takes the responsibility of matterial on behalf of the supplier and the another Financail firm take the responsibility of the Amount. To make these transaction clear fair and smooth, both the financial firm both side takes the Amount of same value or keeps the property of the involved parties and issues the L/C. These L/C are taking in confident both the parties of Amount and Delivery of Goods.

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