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LETTER OF CREDIT (PARTICULARS) Documentary Credits (Letters of Credit) The documentary credit**-letter of credit, documentary letter of credit, or commercial letter of credit**-is an arrangement whereby the applicant (the importer) requests and instructs the issuing bank (the importer's bank) or the issuing bank acting on its own behalf, pays the beneficiary (the exporter) or accepts and pays the draft (bill of exchange) drawn by the beneficiary, or authorizes the advising bank or the nominated bank to pay the beneficiary or to accept and pay the draft drawn by the beneficiary, or authorizes the advising bank or the nominated bank to negotiate, against stipulated document(s), provided that the terms and conditions of the documentary credit are fully complied with. For purpose of maintaining uniformity in the text, the words "letter of credit", "credit" and "L/C" are used on this website to refer to the documentary credit. Irrevocable versus Revocable Letters of Credit A letter of credit (L/C) can be irrevocable or revocable. The L/C usually indicates whether it is an irrevocable or revocable letter of credit. In the absence of such indication, the L/C is deemed to be irrevocable. Irrevocable Letter of Credit An irrevocable letter of credit cannot be amended or cancelled without the consent of the issuing bank, the confirming bank, if any, and the beneficiary. The payment is guaranteed by the bank if the credit terms and conditions are fully met by the beneficiary. The words "irrevocable documentary credit" or "irrevocable credit" may be indicated in the L/C. In some cases, an irrevocable L/C received by the beneficiary may become invalid without the amendment or cancellation of such L/C, for example, when the trade between importing and exporting countries is suspended such as in a trade sanction, or when the issuing bank has ceased operation.