A revocable letter of credit allows the bank issuing the letter to modify the terms of the letter only after obtaining the approval of both exporter and importer.

Question

Quizplus · Accepted Answer

A revocable letter of credit can be modified or cancelled by the issuing bank without the permission of the exporter or importer, which makes it a risky option for exporters. A confirmed, irrevocable letter of credit provides more security for both parties.

A Revocable Letter of Credit Allows the Bank Issuing the Letter