LS0896: Mr. Anil Sharma and Mr. Rahul Khanna are partners of M/S Sharma exports, Mumbai

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Question: Mr. Anil Sharma and Mr. Rahul Khanna are partners of M/S Sharma exports, Mumbai.

They declined lucrative corporate job offers and decided to plunge into the world international business. The partners conducted an indepth market survey in the domestic as well as international markets regarding the demand of women’s apparels in cotton and hosiery and finally decided to establish their business for apparels. Thus, both decided to import the fabric from abroad.

Mr. D’Souza who lives in Thailand agrees to ship them the desired fabrics on a condition if the partners get the Letter of credit from their bank.

a) Discuss the mechanism of the letter of credit which will be involved in the above case.

b) Discuss the Obligations and Responsibilities of the Issuing Banks, Advising bank and the confirming bank in the above transaction.


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