New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    In a documentary credit transaction, what is the

    significance of the 'expiry date' mentioned in the letter of credit?
    A It determines the deadline by which the goods must be shipped. Correct Answer Incorrect Answer
    B It specifies the latest date by which the documents must be presented to the bank for payment. Correct Answer Incorrect Answer
    C It indicates the last date by which the buyer must make the payment. Correct Answer Incorrect Answer
    D It outlines the last date for the exporter to confirm the sale price. Correct Answer Incorrect Answer
    E It is the date when the buyer must receive the goods. Correct Answer Incorrect Answer

    Solution

    The expiry date in a documentary credit specifies the latest date by which the exporter must present the required documents to the bank in order to receive payment. If the documents are presented after this date, the exporter may not receive payment under the terms of the letter of credit.

    Practice Next