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.
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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
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
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
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
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