L/C is a written undertaking by a bank given to the exporter at the request of the importer to effect payment up to a stated sum of money, within a prescribed time limit and against stipulated documents. L/C is the most generally used method of payment in the financing of international trade. It is reliable and safe because it gives mutual protection to both the exporter and the importer. The exporter is assured of payment once he has shipped the goods as stipulated in the contract and the importer is assured of getting the right goods once he has made payment accordingly.