I (Meaning and importance of Exports) Unit Structure

11.12.3 PARTIES INVOLVED IN LETTER OF CREDIT 
The following parties involved in L/C are as follows 
1) Opener 
 
 
The importer or the buyer at whose instance and whose 
behalf the letter of credit is opened.
 
2) Beneficiary 
 
 
The seller or the exporter who is entitled to receive payment 
under the L/C. 
3) Opening/Issuing Bank 
The importer‟s bank which opens the L/C. 
4) Negotiating Bank 

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This is the exporter bank in his country expressly nominated 
by the opening bank to make payment to the beneficiary on 
fulfillment of terms and conditions stipulated in the L/C. 
5) Advising Bank 
 
 
This is the foreign correspondent of the opening or issuing 
bank which advises the letter of credit to the seller duly 
authenticated otherwise. 
6) Confirming Bank 
 
 
Bank in exporter‟s country which guarantees the credit on 
the request of the opening bank. 
11.12.4 
 TYPES OF LETTER OF CREDIT 
 
 
 
There are several types of letter of credit, which are stated 
as follows. 
1. Revocable L/C 
Revocable L/C is one which can be cancelled or modified at 
any time without notice to the beneficiary. In this type of L/C, the 
issuing bank reserves the right to withdraw, cancel of modify the 
credit, at any time. It might be revoked before the goods are 
dispatched. 
The major weakness of revocable L/C is that it may b e 
cancelled or modified without prior permission of the beneficiary by 
the issuing bank. This type of L/C is not very popular.