Letter of credit Meaning, Definition & Usage
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noun a document issued by a bank that guarantees the payment of a customer's draft; substitutes the bank's credit for the customer's credit
WordNet
Definitions
- a letter or notification addressed by a banker to his correspondent, informing him that the person named therein is entitled to draw a certain sum of money; when addressed to several different correspondents, or when the money can be drawn in fractional sums in several different places, it is called a circular letter of credit.