Irrevocable Letter of Credit

Glossary

Banking

Irrevocable Letter of Credit

In international trade finance, an Irrevocable Letter of Credit (ILOC) from an importer’s bank to an exporter’s bank guarantees that payment on agreed terms will be made. If the importer is unable to cover the trade contract, the importer’s bank will make payment. The ILOC cannot be altered unless all parties to the transaction agree (hence irrevocable).

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