Letter of Credit – L/C:
L/C meaning Letter of Credit. Letter of credit is done between applicant to beneficiary. This term is used in commercial department. Letter of Credit -L/C set up is the work of commercial section in garment factory. A commercial officer should have clear concept on letter of credit. It is also called Documentary Credit is a widely used term to make payment secure in domestic and international trade. That’s why Letter of Credit- L/C is very important in apparel manufacturing. We are showing a flowchart here to show the process of L/C
Flow Chart of L/C Letter of Credit
Buyer and Garments manufacturer make sales contract after agreement.
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Buyer send letter of credit to buyer issuing bank
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Issuing bank send prepared letter of credit to advising bank
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Advising bank send letter of credit to garments manufacturer
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Garments manufacturer make shipment to buyer
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Garments manufacturer prepare all document to advising bank
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Advising bank send all prepared document to buyer
Flow Chart of L/C Letter of Credit 1
Requirement of garments material with specification
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To inform about requirement to departmental head
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Management will search for the actual requirement
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Various company will response with those specification
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Then the management select some offers
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Then discussion will be among two management
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Management will sign the agreement with the selected company / agencies
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Then negotiation will take place among management / agencies
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Submitting the final PI
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Bank will open L/C