1. Revocable letter of credit: A revocable L.C can be cancelling or modified without the consent of all the parties. The issuing bank can inform the advising bank for any change in the L.C. The seller can face the problems of obtaining payment directory form the buyers. 2. Irrevocable letter of credit: Irrevocable credit cannot be altered or modified without the consent of all the parties i.e. The opener, the opening bank, the confirming bank and the bank beneficiary. This type of L.C is issued under terms and conditions of sales contract. 3. Confirmed L.C: The confirm letter of credit has the protection of credit standing of the importers as well as the importer's bank. The exporter's bank gives undertaking to honor the draft. The seller gets double assurance of payments form the issuing and advising bank. 4. Unconfirmed L.C: In case of an unconfirmed L.C the bank through whom the credit is negotiated, the advising bank does not give any guarantee to the exporter that the bill drawn will be honored by the issuing bank. The unconfirmed L.C is a commitment of the issuing bank to honor the draft. 5. Documentary L.C: A documentary L.C is one which provides for bills to be accompanied by the documents of title to goods. Such as bill of lading, invoice and the marine insurance policy of insurance etc. 6. Clean letter of credit: If there is no condition attach to the bill and the issuing bank makes payment up to a limit of credit, the letter of credit is called clean or open letter of credit. It is payable to the exporter according to his will. 7. Fix Letter of credit: The amount of this type of letter of credit remains the same within a fix period. When the original fixed amount is used fresh credit is necessary. In other words, a fixed L.C. Is that which is available for a fixed total amount payable in one or more than one drafts. 8. Revolving L.C: The amount of this L.C. Is automatically renewed or received when the certain conditions are fulfilled is called a revolving letter of credit.
