Froms Of Credit

Documentary Credit may be either

1. Revocable

2. Irrevocable.

Revocable Credit: A revocable Credit is a credit which can be amended or cancelled by the issuing Bank at any time without prior notice to the seller. The cancellation or amendment, however, takes effect against the bank which has negotiated bills under the credit only on receipt of such notice of cancellation or amendment. The issuing Bank is liable for bills negotiated conforming to the terms and conditions of the Credit before the Negotiating Bank receives the notice of revocation.


Irrevocable Credit: An irrevocable Credit Constitutes a definite undertaking of the Issuing Bank, provided that the stipulated documents are presented and the seller fulfills the terms and condition. Obviously it can not be amended or cancelled without the agreement of all parties concerned. An irrevocable Credit may be either confirmed or unconfirmed depending on the desire of the seller..


Irrevocable Credit is always preferred to the Revocable Credit.. 

In accordance with Article 6 of UCPDC , 1993 Revision ICC publication no 500, the Credit should clearly indicate whether it is revocable or irrevocable. In the absence of such indication the Credit shall be deemed to be irrevocable..