The orb of application of the letter of credit method of payment is insufficiently wide, its specific gravity in structure of forms of clearing settlements is rather insignificant, but is stable as in the conditions of command economics, and market. The essence of the letter of credit method of payment consists that the payer entrusts with a jar servicing it to effect for the bill of the tools previously deponed on the bill, or against security a jar disbursement of material assets on location of the fund receiver subject to conditions, envisioned by the payer in the application on establishment of letter of credit.
The bill of credit represents the conditional liability of jar produced by it on the instructions of the client in favour of its counterpart by agreement on which one the jar unblocking the bill of credit (issuing bank), can effect to the supply contractor paying or invest with powers to other jar to fabricate such payings under condition of allocation of the deeds envisioned in the bill of credit by it, and at fulfilment of other conditions of the letter of credit. If the jar which has exhibited the bill of credit (issuing bank), on the instructions of the payer (buyer) translates tools in other jar – jar of the supply contractor 4 paying implementation at fulfilment of all conditions envisioned in the bill of credit, in a jar of the supply contractor the separate balance account "Bills of credit" is discovered. According to the Rule ABT clearing settlements in our country following sorts of bills of credit can be discovered: . Coated (deponed) or uncovered (secured); . Revocable or irrevocable. Bills of credit at which one discovering the issuing bank enumerates independent means of the payer are considered as coated (deponed) or grants its the loan in the instruction of jar of the supply contractor (performing jar) on all period of validity of liabilities of bank of the emitter. Fig. 1 Letter of credit method of payment W preliminary bailment of tools. 1 – making contract ABT accounts W usage of the letter of credit method of payment W preliminary bailment of tools on the separate bank account; 2 – transmission to application jar on establishment of letter of credit, the money order ABT bailment of tools, and then writing off of tools from the bill of the buyer; 3 – a transfer of funds in jar of the supply contractor and transfer of tools to account "Bills of credit"; 4 – the message to the supply contractor ABT establishment of letter of credit; 5 – delivery of goods (rendering of services); 6 – the calculation documents confirming dispatch of a product (rendering of services), subject to the conditions agreements are routed to jar of the supply contractor, and writing off of tools from the bill implements "Bills of credit" and transfer of tools to account of the supply contractor; 7 – the message on usage of the bill of credit is routed to jar of the buyer; 8 – the message to the buyer ABT usage of the bill of credit. At installation between jars of correspondence relations the uncovered (Secured) bill of credit can be discovered in a performing jar by allocation to it of the right to write off all amount of letter of credit from the bill of an issuing bank carried on for it. Letter of credit method of payment W bank guarantee usage: 1 – making contract ABT accounts W usage of the letter of credit method of payment W allocation by jar of the buyer of a guarantee of payment; 2 – transmission to application jar on establishment of letter of credit against security a jar and reflectance of establishment of letter of credit on a below-line balance account «Warranties and jar guarantees»; 3 – the message on establishment of letter of credit and reflectance of establishment of letter of credit on a below-line balance account; 4 – the message to the supply contractor ABT establishment of letter of credit; 5 – delivery of goods (rendering of services); 6 – the calculation documents confirming dispatch of a product (rendering of services), subject to the conditions agreements are routed to jar of the supply contractor and transfer of tools to account of the supply contractor implements; 7 – the debit advice is routed to jar of the buyer where writing off of tools from the bill of the buyer is fabricated, for want of tools on the bill of the buyer the jar grants to the payer the loan; 8 – the message to the buyer ABT writing off of tools from the bill. The irrevocable letter of credit cannot be changed or nullified W / O the consent of the supply contractor in which one favour it has been open. The supply contractor can be refused ahead of schedule from usage of the bill of credit if it is provided by conditions of the letter of credit. In Russia the bill of credit can be intended for accounts only W one supply contractor and cannot be readdressed. Payment from the bill of credit is not admitted by cash. Usage of bills of credit in international payments is regulated Unitized regulations and customs 4 the documentary credits approved by the International chamber of commerce in December, 1993 The period of validity and the procedure of payments under the bill of credit is installed in the agreement between the payer and the supply contractor. Discovering by an issuing bank of the secured bills of credit implements on Arrangements W the buyer and subject to the conditions correspondence relations W other jar. Payments under the bill of credit are fabricated during period of its operation installed in the agreement of the sides. At the letter of credit method of payment all fundamentals of implementation of accounts are completely observed: commodity is paid after its dispatch; disbursement is fabricated with the consent of the payer expressed in this case by the fact of establishment of letter of credit; the right to be refused from disbursement if agreement breaches of conditions are detected is granted the payer; the bill of credit is discovered for the bill of tools of the buyer or of the jar credit if the buyer has the right to its obtaining. A positive side of the letter of credit method of payment is the guarantee of payment. At the same time a number of significant lacks which one have predetermined a restricted orb of its application is inherent in this method of payment: tools of the buyer in an amount of letter of credit are sidetracked from its economic circulation on a validity of letter of credit; trade turnover as the supply contractor before letter of credit opening cannot load out already finish products is decelerated also carries additional expenditures on storage.
