Question

State with reasons whether the following statements are True or False.

Letter of credit is required for obtaining export license.

Answer 1

Letter of credit is required for obtaining export license- False

Explanation:
To obtain an export licence, an exporter requires an IEC (Importer Exporter Code) number, a registration-cum-membership certificate and a bank account number. However, a letter of credit is not required for obtaining an export licence. A letter of credit is infact issued by the bank of an importer guaranteeing payments to the exporter’s bank.