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letter of credit

Line breaks: let¦ter of credit

Definition of letter of credit in English:

noun

A letter issued by a bank to another bank (especially one in a different country) to serve as a guarantee for payments made to a specified person under specified conditions.
Example sentences
  • By way of illustration, take a case in which the customer requests the bank, or other institution, to issue a letter of credit or guarantee to back his purchase of goods.
  • A letter of credit is issued by a bank and guarantees payment to the exporter at a specified time, generally, thirty, sixty, or ninety days, on behalf of the importer.
  • The Government provided a guarantee for banks' deposit and other claims, such as borrowing, guarantee and letters of credit issued by the banks.

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