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Lc Without Recourse for India

Lc Without Recourse Template for India

A Letter of Credit Without Recourse is a financial instrument governed by Indian banking laws and international trade practices, particularly UCP 600. This document represents an irrevocable commitment by a bank to pay the beneficiary (typically a seller/exporter) a specified amount upon presentation of compliant documents, with the distinctive feature that once payment is made, the negotiating bank cannot seek recourse from the beneficiary if the issuing bank fails to reimburse. This arrangement provides enhanced security for the beneficiary while facilitating international trade transactions under Indian jurisdiction.

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What is a Lc Without Recourse?

The LC Without Recourse is a specialized financial instrument essential for international trade transactions where the beneficiary seeks maximum payment security. This document type is particularly relevant when dealing with cross-border transactions under Indian jurisdiction, where exporters want to eliminate the risk of future payment recalls. The LC Without Recourse differs from standard Letters of Credit as it explicitly waives the bank's right to reclaim payment from the beneficiary once documents are accepted, even if the applicant defaults. This arrangement is governed by Indian banking laws, Reserve Bank of India guidelines, and international practices (UCP 600), making it a robust instrument for international trade finance. The document typically includes detailed terms about payment conditions, document requirements, shipping terms, and explicit without recourse provisions.

What sections should be included in a Lc Without Recourse?

1. Letter Reference and Date: Unique LC reference number and date of issuance

2. Form of Documentary Credit: Specification that this is an irrevocable LC without recourse

3. Applicant Details: Full name and address of the party requesting the LC (typically the buyer)

4. Beneficiary Details: Full name and address of the party in whose favor the LC is issued (typically the seller)

5. Issuing Bank Details: Full name and address of the bank issuing the LC

6. Amount and Currency: The credit amount and currency, stated in both figures and words

7. Expiry Details: Expiry date and place for presentation of documents

8. Without Recourse Declaration: Clear statement of the without recourse nature of the credit

9. Payment Terms: Specification of when and how payment will be made (at sight, deferred, etc.)

10. Required Documents: Detailed list of all documents required for presentation

11. Shipment Terms: Details of shipment including latest shipment date and partial shipments status

12. Special Conditions: Any additional terms or conditions specific to this LC

What sections are optional to include in a Lc Without Recourse?

1. Advising Bank Details: Include when a separate advising bank is involved in the transaction

2. Confirming Bank Details: Include when the LC requires confirmation from another bank

3. Transferability Clause: Include if the LC is transferable to other beneficiaries

4. Red Clause: Include if advance payment is permitted under the LC

5. Green Clause: Include if warehouse storage-related advances are permitted

6. Back-to-Back Provisions: Include if the LC can be used as collateral for another LC

7. Revolving Credit Terms: Include if the LC is revolving in value or time

What schedules should be included in a Lc Without Recourse?

1. Schedule A - Document Requirements: Detailed checklist of required documents and their specifications

2. Schedule B - Goods Description: Detailed description of the goods or services covered by the LC

3. Schedule C - Payment Schedule: If payments are to be made in installments or against multiple shipments

4. Appendix 1 - UCP 600 Compliance: Specific references to applicable UCP 600 articles

5. Appendix 2 - SWIFT Format: SWIFT message format details if applicable

6. Appendix 3 - Amendment Format: Standard format for future amendments to the LC

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

India

Publisher

Ƶ

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions


































Clauses






























Relevant Industries

Banking & Financial Services

International Trade

Manufacturing

Import/Export

Shipping & Logistics

Commodities Trading

Textile Industry

Agricultural Products

Heavy Machinery

Oil & Gas

Mining

Chemicals & Pharmaceuticals

Relevant Teams

Trade Finance

International Banking

Legal & Compliance

Risk Management

Treasury Operations

Documentary Credits

Export Operations

Import Operations

Credit Control

Banking Operations

Relevant Roles

Trade Finance Manager

International Banking Officer

Export Finance Specialist

Import Operations Manager

Documentary Credits Manager

Compliance Officer

Treasury Manager

Trade Operations Analyst

Risk Management Officer

Legal Counsel

Banking Relationship Manager

Credit Risk Officer

Trade Documentation Specialist

Financial Controller

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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