Documentary Credit System is a payment system used in international trade where the BUYER and SELLER are from different countries. It is developed to include a measure of security to trade transactions by involving a third party, the BANK.The bank provides additional security for both parties i.e. it plays the role of an intermediary by assuring the seller that he will be paid if he provides the bank with the required documents and by assuring the buyer that his money will not be paid unless the shipping documents evidencing proper shipment of his goods are presented. How Documentary … [Read more...]