Confirmed Letter Of Credit (L/C)

Categories: Credit and Debt, Banking,

A guaranteed mode of payment in interbank transactions that provides the highest degree of protection against default. The advising bank acts as the agent of the issuing bank and undertakes tasks such as verification of the letter of credit, determination of authenticity and processing of the transaction. Confirmation can be sought by the seller by requesting the advising bank, which will either accept or decline the request to undertake the responsibility of honoring the letter of credit on the terms of presentation of the specified documents on or before the expiry date of the L/C. Opposite of unconfirmed letter of credit.