Demystifying Sight LC

Imagine you're buying Agro-Industrial machines from a seller across the country. You want to make sure you get the machines before you pay, and the seller also wants to make sure he/she gets paid before the items are sent. That's where Sight LC comes in!

Think of it like a "cash on delivery" option for international trade. Here's how it works:

You (the buyer): Go to your bank (the issuing bank) and ask them to issue a Sight LC to the seller's bank (the advising bank).

Your bank: Creates a special account with the seller's bank and puts the money for the machines in it. This is like holding the money in your hand but not giving it to anyone yet.

Seller's bank: Tells the seller about the LC and holds it as a guarantee. The seller feels safe sending the machines because he/she knows payment will be made instantly when they arrive.

Shipment: The seller sends the machines, and the shipping company gives them documents proving it arrived in the buyer's country.

Delivery and payment: When the machines arrive at your location and you confirm you're happy with it, you tell your bank. Your bank tells the seller's bank to release the money from the special account. The seller gets his/her money immediately.


Benefits for you (the buyer):

Peace of mind: You don't have to pay until you see the machines, so you're protected if there's any problem.

No waiting: You get the machines quickly because the seller knows he/she will get paid instantly.

Simple process: It's like paying cash on delivery, but with a bank taking care of everything.

Sight LC is like a secure handoff: it makes sure both you and the seller get what you want at the same time, without any worries about trust or delays.

I hope this simpler explanation makes sense! Don't hesitate to reach out to me for your Trade Finance needs.

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