I (Meaning and importance of Exports) Unit Structure

2. Irrevocable L/C 
This type of L/C is preferred to revocable letter of credit. In 
this type, once the L/C is accepted by the exporter, it can not be 
cancelled or modified by the buyer of issuing bank without prior 
permission of the beneficiary and other parties involved such as 
confirming bank. Exporters normally insist on irrevocable letter of 
credit because it does not have ht inherent weakness of revocable 
letter of credit. 
3. Confirmed L/C 
 
 
 
When it is necessary for an irrevocable credit to be 
confirmed for the beneficiary by another bank, arrangements bank 
adds its confirmation on receiving necessary authorization from the 
issuing bank, it binds itself to negotiate documents there under. 

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4. Unconfirmed L/C 
 
 
As the name indicates, Unconfirmed L/C is one to which 
confirmation is not added by the advising bank. There fore, the 
bank does not accept the liability to make payment. The risk of non-
payment is high. 
5. With Recourse L/C 
In this type, the exporter is held liable to the 
paying/negotiating bank, if the draft/bill drawn against L/C is not 
honored by the importer issuing bank. The negotiating bank can 
make the exporter to pay the amount along with the interest, which 
it has already paid to the beneficiary. 
6. Without Recourse L/C 
 
 
It is popularly known as sans recourse L/C. this L/C is 
without the condition. In case the bill is not honoured by the 
importer and the negotiating bank has already paid to the exporter, 
the negotiating bank cannot ask the exporter, to refund the amount. 
The negotiating bank can take recourse to the opening bank and 
the opening bank can demand money from the importer. This is 
generally an irrevocable L/C which projects the interests of the 
exporter. Hence an irrevocable, Without recourse and confirmed 
L/C is the most secured L/C.