Confirmation Letter Of Credit Approval
A credit approval letter is an official letter which is approved by the bank to notify the client or customer that their application for certain credit term has been approved.
Confirmation letter of credit approval. A confirmed letter of the credit deals with the credit details that have been approved by a certain financial institution. Here a sample is given that contain the details. A confirmed letter of credit is typically used once the availability bank of the letter of credit may have questionable trustworthiness and thus the trafficker seeks to induce a second guarantee to assure payment.
The confirmed letter decreases the risk of default for the seller. A confirmed letter of credit is a guarantee a borrower gets from a second bank in addition to the first letter of credit. The letter also contains the terms and conditions of the limit of credit and also about the rate of interest which is fixed on the credit.
In different word a letter of credit is also a document issued by a bank that allows the holder of the letter to draw the funds as declared on the letter from the availability bank. With a confirmed letter of credit another bank the confirming bank usually located in the same country that the exporter is located will add its confirmation to the letter of credit. By adding its confirmation the confirming bank undertakes to honour the exporter s claim under the letter of credit provided all terms and conditions of the letter of credit are met.
