Addendum to how a Letter of Credit works
Hi all, this is an addendum to my previous article on how an LC works.. If there is a requirement for an LC to be extended, for whatever reason, the seller has to contact the buyer who opened the LC and they will have to inturn contact the issuing bank with valid reasons for the extension.. Based on this reason the LC may or may not be extended..
Usual reasons for LC extension requests could be :
- delay in the export material being ready
- delay in the carrying vessel – due to weather or issues from the shipping line’s side
- if there is any unprecedented customs stop on the export cargo
- non-availability of suitable container
- cargo inspection certificates not ready
- non-availability of a vessel during the time frame required
What has been your experience or issues with the extension of LC..??