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Unconfirmed Lc for India

Unconfirmed Lc Template for India

This document represents an Unconfirmed Letter of Credit (LC) governed by Indian law, which serves as a conditional payment undertaking issued by a bank on behalf of a buyer in favor of a seller. The document follows the regulatory framework established by the Reserve Bank of India and adheres to the Uniform Customs and Practice for Documentary Credits (UCP 600). It provides detailed terms and conditions for the payment mechanism, including document requirements, shipping terms, and compliance requirements under Indian banking and foreign exchange regulations. Unlike a confirmed LC, this unconfirmed version carries the payment assurance only from the issuing bank, without additional confirmation from another bank.

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Unconfirmed Lc

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What is a Unconfirmed Lc?

The Unconfirmed LC is a crucial trade finance instrument widely used in Indian international trade transactions. It is primarily employed when importers need to provide payment security to overseas exporters while maintaining control over the transaction through documentary requirements. This document type is particularly relevant when the exporter is comfortable with the creditworthiness of the Indian issuing bank without requiring additional bank confirmation. The document incorporates essential elements required by Indian banking regulations, FEMA guidelines, and international banking practices under UCP 600. It specifies payment conditions, document requirements, and compliance aspects while considering Indian foreign exchange controls and banking regulations. The unconfirmed nature means that only the issuing bank's payment undertaking is available, making it a more cost-effective option compared to confirmed LCs while still providing adequate security for standard trade transactions.

What sections should be included in a Unconfirmed Lc?

1. Issuing Bank Details: Complete name, address, and SWIFT code of the issuing bank

2. LC Number and Date: Unique identification number and date of issuance of the LC

3. Applicant Details: Full name, address, and contact information of the buyer/importer

4. Beneficiary Details: Full name, address, and contact information of the seller/exporter

5. Currency and Amount: LC amount in figures and words, and specified currency

6. Expiry Date and Place: Final date and location for presentation of documents

7. Shipment Terms: Latest shipment date, partial shipments, transhipment conditions

8. Document Requirements: List of required documents for LC negotiation

9. Goods Description: Detailed description of goods being traded

10. Payment Terms: Timing and conditions for payment

11. Governing Law: Specification of Indian law as governing law

What sections are optional to include in a Unconfirmed Lc?

1. Tolerance Provisions: Acceptable percentage variations in quantity and amount, used when flexibility is needed in shipment quantity

2. Transfer Conditions: Terms under which the LC may be transferred to another beneficiary, if transferable

3. Red Clause: Advance payment provisions, included when seller requires pre-shipment finance

4. Green Clause: Warehouse storage provisions, used when goods need intermediate storage

5. Special Instructions: Any additional terms or conditions specific to the transaction

6. Confirmation Instructions: Instructions regarding potential future confirmation of the LC by another bank

What schedules should be included in a Unconfirmed Lc?

1. Commercial Invoice Template: Prescribed format for the commercial invoice to be submitted

2. Packing List Requirements: Detailed specifications for the packing list

3. Transport Document Requirements: Specific requirements for bills of lading or airway bills

4. Insurance Document Requirements: Format and coverage requirements for insurance documents

5. Certificate of Origin Requirements: Specifications for origin certification

6. Inspection Certificate Requirements: Details of required inspection certificates and authorized inspectors

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

Import/Export

Manufacturing

Retail

Commodities

Agriculture

Textiles

Electronics

Automotive

Chemical & Pharmaceuticals

Mining & Metals

Oil & Gas

Relevant Teams

Trade Finance

International Banking

Treasury

Finance

Legal

Compliance

Risk Management

Operations

Supply Chain

Procurement

Documentary Credits

International Trade Operations

Relevant Roles

Trade Finance Manager

Import Manager

Export Manager

Letter of Credit Specialist

International Banking Officer

Trade Operations Manager

Documentation Officer

Compliance Officer

Treasury Manager

Finance Director

Chief Financial Officer

Banking Relationship Manager

International Trade Specialist

Supply Chain Manager

Procurement Manager

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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