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What is 'Red Clause" Letter of credit?

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تم إضافة السؤال من قبل SREEDEVI SUNILKUMAR , Business finance officer , Emirates Airline
تاريخ النشر: 2014/11/18
VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
من قبل VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

IN Red clause letter of credit the applicant(buyer)authorizes the confirming bank or any other nominated bank to pay a specified amount to the beneficiary.this clause was traditionally written in red so it was called as red clause letter of credit.this type of L/C would part finance the middle men r the dealers of the beneficiary and the buyer may be willing to have concessions on his payment.this type of Letter of credit  is heavily used in fur industry in China & Australia .

mohamed Hakim CMA CPA Candidate
من قبل mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia

 Really , i learn from your question and also the answers 

Thanks for all

Dawood Kapasi
من قبل Dawood Kapasi , Consultant , Deloitte

A specific type of letter of credit in which a buyer extends an unsecured loan to a seller. It is used by beneficiaries who purchase on someones behalf in another country.

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