4.3 Documentary Credits

The letter of credit (L/C): the bank's promise — the issuing bank's undertaking to pay the seller (the beneficiary) against the documents' presentation (the credit's terms: the documents — the invoice, the B/L, the insurance, the inspection certificates). The principle of independence (the autonomy): the credit separate from the sale (the bank pays on the documents — not the goods; the fraud exception's narrowness). The strict-compliance doctrine: the documents' exact match (the UCP's standard — the ICC's Uniform Customs-and-Practice 600's faces); the discrepancies' consequences (the refusal's notice; the cure's window). The parties' chain: the applicant (the buyer), the issuing bank, the advising bank, the confirming bank (the added promise), the nominated-and-transferring banks. The types: the sight-usance credits; the revocable-irrevocable (the modern irrevocable norm); the confirmed (the country-risk cover — the developing-country trade's staple); the transferable-and-back-to-back (the intermediary trade); the standby (the default's security — the guarantee's sibling). The Nepal practice: the L/C's necessity (the NRB's import rules — the letters-of-credit mandates for the imports; the banks' trade-finance departments); the export proceeds' discipline; the e-LC's development.