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In case of sight LC the moment issuing bank determine that the presentation of documents are comply with the terms and condition of the credit and applicable rules like UCP, ISBP need to pay immediately.
And in case of USANCE LC- after presentation of comply documents, issuing bank have to pay at the time of maturity like 30 or 60 from the date of shipment, or from the date of acceptance etc.
in short we can say that in case of sight- immediate payment to Bene. and in case of usance- payment to be made on future date ( maturity date ).
At sight Payment after receiving all documents & Usance means credit (as agreed)
At Sight LC means beneficiary received the payment immediate upon presentation of the clean documents where as in Usance/Deferred LC, Payment to the beneficiary is after a period as per the payment Terms in the LC up on presentation of documents and acceptance by the bank.
The main difference between these two types is the different in payment time.
In Sight LC : The payment to the beneficiary is immediate upon presentation of the clean documents.
In Usance/Deferred LC the Payment to the beneficiary is after a period as per the payment Terms and conditions in the LC
Lc Sight : means beneficiary will receive payment immediately after deliver the material and submitting full lc document's .
and Lc Usance: means beneficiary will receive payment after payment terms schedule as mentioned in lc payment terms .
LC at sight - Immediate payment upon the presentation of correct documents
Usance LC -Payment are deferred, according the Terms and conditions of LC
Documents under Sight LC are payable immediately provided they are compliant with LC terms.
Documents under Usance LC are payable at an agreed future point of time.
A sight LC causes payment to be made immediately to the beneficiary/seller/exporter upon presentation of the correct documents.
Usance LC : the payment to the seller is not made when the documents are submitted, but instead at a later time defined in the letter of credit after acceptance of correct documents.
Usance LCs are usually for a period of 30, 60, 90 days etc.
The main difference between Sight and Usance LCs is different payment method. In case of Sight LC, importer's bank will pay the bill of consignment to the applicant's bank during the retirmement of documents from Beneficierie's bank. On the other hand, Usance LC gives a future time (30, 60, 900r 120 days ) to make the payment as mentioned in the LC.
