One app for all your study abroad needs
The Full Form of LC is a Letter of Credit. An LC is a legal document that a bank issues to a seller as payment assurance for goods or services rendered. Moreover, the LC represents the bank’s promise to compensate the seller even if the buyer does not fulfil their end of the bargain. Additionally, this helps protect the buyer from fraud and provides the seller with the certainty that they will be paid. Furthermore, LCs are frequently used in international trade where there is a danger of non-payment and the buyer and seller may not be well acquainted. The LC offers a means of reducing this danger and guaranteeing the safety of both parties.
Table of Contents
What are the Features of a LOC?
In addition, the characteristics of a Letter of Credit are as follows:
- The LC is negotiable, though, if it is given as an unconditional promise to pay the amount upon demand at a particular time. Additionally, it can be easily transferred from one party to another. The LC is regarded as being a straightforward instrument that is amenable to negotiation and can be used as money.
- Letters of Credit can either be revocable or irrevocable. Most often, irrevocable LCs are used since they cannot be modified without the consent of all parties. However, if a bank provides a revocable LC, that bank has the power to cancel that LC at any moment.
Also Read: What is the Full Form of CHSL?
What is the Importance of LOC?
Letters of Credit are a dependable payment method. Since international trading involves complicated issues like distance, disparate legal systems, and the absence of personal interaction. Moreover, Letters of Credit are governed by the “International Chamber of Commerce Uniform Customs and Practise for Documentary Credits.”
Also Read: What is the Full Form of INDIA?
Who are the Parties involved in a Letter of Credit?
Furthermore, the parties that are involved are as follows:
- The importer, who is the applicant, asks the bank to issue the LC.
- (Exporter) Benefit
- The bank that issues the LC (sometimes referred to as the opening banker of the LC) is the issuing bank.
Also Read: What is the Full Form Of NVS?
What are the Types of Letters of Credit?
Additionally, the Types of Letter of credit:
- Revocable LCs: The issuing bank may change or revoke this form of LC without the beneficiary’s consent.
- Transferable LC: This kind of LC can be used as money and may be transferred by the seller to other parties.
- Irrevocable LC: Without the beneficiary’s previous consent, this sort of LC cannot be changed or cancelled.
Also Read: What is the Full Form of ABC?
Other LC Full Forms
Here are other LC Full Forms:
- LC Full Form in School: A school Leaving Certificate is an official document. It is given by a school that verifies a student’s enrollment and academic history. Moreover, it is usually required for transferring to a new school, applying to higher education, or beginning certain jobs.
- LC Full Form in Court: A Lower Court is the first level of a court system where legal cases are heard.
- LC Full Form in Electricity: An LC circuit is made simply of an inductor and a capacitor. This circuit can store energy and oscillate it back and forth between the magnetic field of the inductor and the electric field of the capacitor.
- LC Full Form in Medical: Lethal Concentration is the amount of a substance suspended in air (or water) that kills 50% of test animals during a specific exposure period.
- LC Full Form in Physics: Liquid Crystal is a state of matter. It has the properties of liquids as well as solids.
Popular Full Forms
We hope this blog has helped you understand the LC Full Form and everything related to it. If you want to know more, find the full forms list on our blog. In the world of short forms, you can rely on the Leverage edu page to know about more full forms like this! Connect with us study abroad experts to achieve your international dream today!