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In international trade, Bank Guarantees (BGs) and Letters of Credit (LCs) play pivotal roles in fostering trust between buyers (importers) and suppliers (exporters). Both instruments minimize the risk of non-payment or non-performance, ensuring smoother transactions. However, their purpose and usage differ significantly, catering to specific trade requirements. What is a Letter of Credit? A Letter of Credit (LC) is a financ...

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In international trade, Bank Guarantees (BGs) and Letters of Credit (LCs) play pivotal roles in fostering trust between buyers (importers) and suppliers (exporters). Both instruments minimize the risk of non-payment or non-performance, ensuring smoother transactions. However, their purpose and usage differ significantly, catering to specific trade requirements. What is a Letter of Credit? A Letter of Credit (LC) is a financ...