7. Revolving Letter of Credit
- If buyer and seller are trading the same commodity regularly on a certain period of time than they may choose to work with a revolving letter of credit instead of issuing a new LC every shipment.
- Buyer’s bank (issuing bank) issues a letter of credit that replenishes either in value or in time.
- Revolves by value : Letter of credit is reissued automatically when credit amount is utilized.
- Revolves by time : an amount is available in fixed installments over a period
