Citibank Letter of Credit

Hello sir I am Peter and I am here as I want to know the Advantages for the seller (recipient of the letter of credit) and buyer (principal of the letter of credit) for Documentary letter of credit of Citibank so will you please tell me about this??

[Pathak]

Citibank is the consumer division of financial services multinational Citigroup. Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York
Documentary letter of credit is a written obligation of the bank issued at the client’s request (in trade relations, the buyer's request) to pay a certain sum after the fulfilment of the conditions stipulated in a letter of credit
The banks involved examine only documents, not goods or services

Advantages for the seller (recipient of the letter of credit)
-the seller’s claim is against the bank rather than a claim against the buyer
-if he fulfils the conditions of the letter of credit, he can be certain that payment will be made by the bank, he can use the letter of credit as a guaranty vis-a-vis his own suppliers
-he can obtain funds immediately if he sells his receivable from the bank pursuant to the letter of credit
-based on a high quality export letter of credit, he can obtain a loan from his bank

Advantages for the buyer (principal of the letter of credit)
-the letter of credit creates considerable pressure on the seller to supply the goods by the stipulated time limit and with the required quality
-he has certainty that he will pay only after the stipulated conditions are met
-he can obtain more advantageous price conditions thanks to the increased certainty of the seller to receive payment when fulfilling the stipulated conditions