Investigating the payment method of revolving letters of credit in international trade

Karamikolmoti, Farzad; Malaekehpourshoshtary, Seyedmihamadhasan

doi:10.22034/jml.2024.2009060.1290

Investigating the payment method of revolving letters of credit in international trade

Articles in Press

Document Type : Promotional article

Authors

farzad karamikolmoti ¹

seyedmihamadhasan malaekehpourshoshtary ²

¹ Instructor of Shahid Chamran University of Ahvaz

² Associate Professor of Shahid Chamran University of Ahvaz

10.22034/jml.2024.2009060.1290

Abstract

In modern business, traditional concepts and tools do not have the efficiency of the past, and legal and commercial systems respond to the needs and necessities of businessmen and businessmen in order to provide appropriate solutions and tools to advance the business goals of individuals. Revolving letter of credit refers to a credit that the issuing bank undertakes to provide the deficit amount and charge it whenever an amount of credit is used during the LC credit period, without this requiring an amendment to be LC This payment method has two major advantages. First, the letter of credit does not need to be renewed for each transaction during the specific period discussed by the parties. Second, it facilitates frequent business. Trade facilitation refers to policies that reduce export and import costs, and the main goal is actually to apply preventive policies. Investigating how the revolving letter of credit payment method works and the principles governing it is the subject of this article.

Keywords

revolving

renewable

cumulative

non-cumulative letter of credit

Subjects