Transferable Lc. 1 transferable letters of credit are sort of documentary credits which can be used in situations where middlemen are playing a certain role. Name of the first beneficiary may be substituted for that of the applicantcustomer.
A transferrable documentary credit is used often in agreements where the sellers need to outsource the raw materials from suppliers. When a letter of credit is transferable the original or first beneficiary is allowed to transfer all or a part of the value of the letter of credit to a third party otherwise known as the second beneficiary. The export lc should state that it is transferable and that dbs is authorised to do this.
The exporting company 1st beneficiary of a letter of credit can transfer all or a portion of the credit to a second party or supplier 2nd beneficiary for the purchase of goods or ser vices.
Talk radio for the uk. A transferrable documentary credit is used often in agreements where the sellers need to outsource the raw materials from suppliers. A transferable lc is issued by bank a in favor of ben 1 and ben 1 transfer this lc to ben 2 by mt720 through bank b the bank is nominated as transfering bank in original lc. In your case it is advisable a back to back lc but you need credit facility with your bank.