Case Study on Standing of Letter of Credit and its Operations at Himalayan Bank Limited, Nepal

Abstract

In today’s world country like Nepal is into the extensive use of financial products which are introduced and in use in most of the developed countries. Financial institution do also offers a standard and commercial letter of credit, a document issued primarily in trade finance which provides an unchangeable payment activity. Letters of credit are used in international trade transactions of significant value for deals between a supplier in one country and a customer in another. The Letter of Credit (L/C) is a payment guarantee by the issuing bank to the seller on behalf of the importer. The letter of credit gives importer the most extensively used and conventional international trade payment means and finance instrument. It promises payment, provided the seller complies with the terms and conditions inside the Letter of Credit. The bank plays most important role as a mediator in Letter of Credit. This study focuses on the operation procedures of Import and the various procedures involved in Letter of Credit and also the report shows how the clients (importers) perceive the Letter of Credit services of the bank since clients (importers) satisfaction is the key in the Letter of Credit department.