Document background
Letters of Credit (LC) and Standby Letters of Credit (SBLC) are fundamental banking instruments used to facilitate secure international trade and financial transactions. These documents are particularly important in the Indian context, where they must comply with RBI guidelines, FEMA regulations, and international banking practices. An LC/SBLC serves as a bank's guarantee to pay, typically used in import-export transactions or as security for financial obligations. The document outlines the conditions for payment, required documentation, and timeframes, providing security to both parties in a transaction. Under Indian jurisdiction, these instruments are commonly used to mitigate risks in cross-border transactions and ensure compliance with foreign exchange regulations.
