In today’s modern time, businesses are expanding their transactions internationally. Mostly big enterprises are running on credit basis. All companies mainly use the way of Letter of credit services for international transactions for long distance and international transactions. Letter of credit is a documentary credit form and the banker’s commercial credit for exporter. Letter of credit is a guarantee document which is given by the bank in the guarantee of the buyer to make payment to the exporter. In this, buyers can buy a product at the cheapest rate of interest. It is also the best way of financing a business in an international way or international trade. This document is the Guarantee letter for payment from the side of the importer.
A letter of credit was first used in Europe in ancient times. In the later 19th and 20th century a letter of credit was firstly used by travelers to increase the business by circular commerce of credit. Now a recent time the letter of credit is replaced by travelers’ credit, credit cards, and automated teller machines.
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