Acceptance credits

One of the ways in which a letter of credit ( www.practicallaw.com/A36346) may provide for payment by the nominated bank (or the issuing bank) to the seller: the seller presents a time bill ( www.practicallaw.com/A37093) (bill of exchange ( www.practicallaw.com/A35923)) with the documents which the bank will accept. The seller obtains immediate cash by discounting the accepted bill with another bank or discount house ( www.practicallaw.com/A34886). The nominated bank pays the time bill on its maturity and then is reimbursed by the issuing bank who in turn is reimbursed by the buyer.

For further details, see Practice note, Letters of credit: overview ( www.practicallaw.com/1-107-3740) .

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