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A documentary letter of credit substitutes the bank's credit for the buyer's. Commission is charged per quarter or part quarter of the tenor on the full value, plus flat negotiation and messaging charges, so short tenors are billed at a minimum of one quarter.
LC cost
Commission = value × rate per quarter × quarters (rounded up) + flat charges
Figures are estimates. Lenders apply their own rounding, fees and eligibility rules, and rates change. This is not financial advice — confirm the numbers with your lender.
Usually split — the applicant pays issuing charges and the beneficiary pays advising and negotiation charges, but the sales contract decides.
Yes. It is a contingent liability and is carved out of the buyer's non-fund-based limit.