GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Documentary Credit


Synonyms:commercial letter of credit, letter of credit arrangement
Filed Under: financial-banking, legal-contracts
Tags: banking, contract, credit, legal
 

Definition of documentary credit

documentary credit
1. Written undertaking by a bank on behalf of an importer authorizing an exporter to draw drafts on the bank up to a specified amount under specific terms and conditions. They are used to facilitate international trade. In the United States, these instruments are called commercial letters of credit.

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