1. Letter of Credit User Guide
  2. An overview of Letters of Credit
  3. Variations Supported for an LC
  4. Revolving and Non revolving LCs

1.5.3 Revolving and Non revolving LCs

You can open an LC and choose to make it available again in its original amount after the goods have been shipped, documents presented and credit is settled. Such an LC is a revolving LC. Under a revolving LC the amount is reinstated or renewed without any specific amendments to the LC. A revolving LC may be revocable or non-revocable, and can revolve in relation to the following:
  • Value
  • Time

This facility can be utilized when a supplier wishes to make repetitive shipments over a period such as a year. The LC can have an automatic reinstatement clause, which provides for continuing the renewal of availability. You also have the option to manually reinstate an LC. The credit may require approval of the opening party before it becomes available again.

Parent topic: Variations Supported for an LC