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What is LC Refinancing ?

What is LC Refinancing ?

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Question added by vijeesh VM , Sr. Treasury Analyst , Saudi Bin ladin Group
Date Posted: 2017/03/27
MOHAMED JAHUBAR SATHIK MOHAMED ABDUL SALAM
by MOHAMED JAHUBAR SATHIK MOHAMED ABDUL SALAM , Senior Procurement and Finance Officer , ETA Star Engineering & Contracting Co. W.L.L

LC Refinancing is nothing but LC loan. 

If you are the Applicant, your bank (Issuing Bank) will pay the invoice amount (Fully/Partly) to Beneficiary and you have to repay at maturity date (As per your facility offer from bank) with Interest. 

Zainul Abidin
by Zainul Abidin , Trade Services co-ordinator , Saad Trading, Contracting & Financial Services Co.

When the required amount as per LC terms to be recovered from  LC applicant (their client), then various banks giving facilities to their reliable clients (creating an other room called "Re-Financing"  to deffer such payment for aspecific time. 

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