Request Letter to Bank for LC Backed Bill Discounting

LCBD is popularly known for the short of Bill Discounting backed with LC i.e. Letter of Credit.

Under the 'bill discounting' method, a customer of the bank presents the bills or invoices (bills of exchange) to the bank for discounting i.e. advance selling of a bill. Wherein the bank deducts some amount as commission or discount from the total amount of the bills and pays the final amount to the customer immediately.

Then on the date when the bills are due for payment, the bank presents the bills to the party who is supposed to pay the billed value and collects the amount. If there is any delay in realisation of bill amount after the due date, then the bank charges interest on it as per agreed terms. This bill discounting system has been in practice for a very long time.

Following format can be used to request the bank for LC backed bill discounting. This is for your reference.

TEMPLATE

Date: ________

To

The Branch Manager

(Name of the Bank)

(Name of the Branch)

(Address)

Sub.: Discounting of documents under LC no. ________ dated ________ for Rs. ________.

Dear Sir/Madam,

Our company is maintaining a current account bearing number ________ in your bank at ________ branch. With reference to the captioned subject, we are enclosing herewith the following documents:

1. LC bearing no. ________ dated ________ for Rs. ________ issued by (Name of the Bank, Branch).

2. Bill of exchange no. ________ for Rs. ________.

3. Invoice no. ________ for Rs. ________ dated ________.

4. Other documents : ________________.

We request you to kindly discount the bill and credit the amount to the above-mentioned current account no. ________ after getting irrevocable acceptance of liability and due date confirmation from LC opening bank.

We further authorize you to deduct from our account any applicable charges or commission in this regard.

We hereby solemnly declare that we have not financed the same documents/bill of exchange under the said LC/invoices with any other bank.

Kindly do the needful.

Thanking you,

Yours faithfully,

For _________ Limited

    (Signature)

Authorised Signatory

Encl.: As above