Tuesday, 30 April 2013

Stand By Letter of Credit

Credit letter are just letters written by the bank or any financial agencies or money lending companies that ensure honesty and integrity of a party that makes a purchase and as well to the selling party. A person who sells various goods promises that she or he will meet the terms and conditions covered by the credit letter. A sample of this letter is as follows:




August 23, 2009

Irrevocable Standby Letter of Credit # {87654321}


United Kingdom Department of Agricultures and Fisheries

Rural Utilities Service

263 Oakdale Avenue
Plant City, FL 33566

To: Erik M. Alvarado

717 Leroy Lane
Watertown, SD 57201


Account Party:

Jim L. Shaw



We, the State Bank of India hereby open our irrevocable, unconditional standby credit on behalf of Erik M. Alvarado in favor of the rural utilities services and the total or sums not to go beyond the aggregate amount of about $250,000 made available by either of the requests for the payment at sight.

Our bank has been informed by the party that through this letter of credit issued to ensure the obligations set forth in the certain loan agreement, entered flanked by the borrower and the rural utilities services, and dated as July 25, 2009. The bank acknowledges the pursuant of the said loan agreement. And this letter of credit may possibly be guaranteed, secured, or serviced by the asset of the borrower.

Issued as subject this letter to uniform custom and practices for the documentary credits, 1994 revisions and the international chamber of commerce series no. 500

Truly yours,

Jim L. Shaw

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