Non Transferable Letter of Credit
Whenever a financial institution issues a Letter of Credit to the beneficiary only and the dealing does not involve any third party, it is called a Non Transferable Letter of Credit. The beneficiary has full access to the amount issued by the bank and is liable to payback the amount all by himself in this case.
In the first paragraph, mention the amount of credit issued and inform the customer with the decision of the board. In the second paragraph, clearly state that the issued document is a Non Transferable Letter of Credit and mention that the amount can only be accessed by the customer himself, to avoid any confusion in the future.
In the concluding text, warn the customer against the consequences of a failure to pay in time. Clearly state that legal action can be taken if the dues are not cleared by the due date.
Instructions
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Sample Non Transferable Letter of Credit
Steve Helmes
Managing Director
Vincent Exporters Limited
May 15, 2012
Subject: Non Transferable Letter of Credit
To Whom It May Concern
I am writing in reference to the request you filed for Letter of Credit of an amount of $8,000. You will be pleased to know that the management of the bank has decided to issue the document judging by your previous record with us.
Serve National Bank is happy to give the guarantee for the payment of goods to the respective party by the due date. However, the issued Letter of Credit is non-transferable and the amount issued can only be accessed by you. No third party can be involved in this transaction according to the terms and conditions.
We sincerely hope you all the best in your business transactions.
Yours sincerely,
George Hicks
Branch manager
Brent Road Branch, NY 4577
Serve National Bank -
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Template of Non Transferable Letter of Credit
[Recipient’s Name]
[Recipient’s Title]
[Recipient’s Company]
[Date]
Subject: Non Transferable Letter of Credit
To Whom It May Concern
I am writing in reference to the request you made for the Letter of Credit on ................... You will be pleased to know that ......................... has agreed to issue a credit for the amount of ................... to your business. However, the Letter of Credit will be a non-transferable one and no third party can access all or some part of the credited amount.
We would further like to clarify that a failure to pay the outstanding amount by the due date could result in legal action against your company.
Thanking you
Yours sincerely,
[Sender’s Name]
[Sender’s Title]
[Sender’s Company]
[Sender’s Address]
