Documentary Letter of Credit (DLC)

A documentary letter of credit is a guarantee from the issuer (i.e., issuing bank) to the beneficiary that the issuer will pay the beneficiary money when the beneficiary provides certain documents to the issuer in a certain manner, time and place as agreed in the DLC.

Documentary letter of credit offers a single universally accepted method of payment in the international trade since it equally protects the interests of both the buyer and seller.