1. Letter of Credit (LC) is an irrevocable undertaking by an Issuing Bank, which substitutes its credit standing for that of its customer, the buyer. The Issuing Bank commits to pay the seller, either at sight or at a determinable future date, up to a stated sum of money within a prescribed time limit, against the presentation of specific documents listed in the LC terms and conditions. These documents typically include commercial documents such as invoices and packing lists, and the LC often involves the transfer of title of the underlying goods or service delivery between the transaction parties. In addition to the above-mentioned elements, it includes a commitment by the exporter's bank (which becomes the confirming bank) to pay in the event of default by the issuing bank.