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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 .
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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.
