Friday, March 31, 2017

What is Red Clause in documentary Credit?

Answer:


A clause typed in red letter inserted in a documentary letter of credit authorizing the advising bank to grant the pre-shipment credit facility to the exporter upto 100% of the credit amount to enable him to purchase the goods and subsequently bank can reimburse the amount by negotiating the shipping documents plus interest for the accrued period is Red Clause in documentary Credit.

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