Of course.

1. Domestic letter of credit is a payment and settlement method, which is suitable for loan settlement of commodity transactions between enterprises and can be directly transferred.

2. Domestic letter of credit is not money, and can only be used for transfer settlement, not cash withdrawal.

To apply for a domestic letter of credit, you need to pay a deposit of 20% of the amount of the letter of credit at the bank.

Can I withdraw cash from the domestic letter of credit?

Domestic letter of credit is a payment and settlement method suitable for domestic trade. It is a written promise issued by the issuing bank to the beneficiary (seller) to pay a certain amount within a certain period of time based on the application of the applicant (buyer) and the documents stipulated in the letter of credit. Can only be used for transfer settlement, not cash withdrawal.

The letter of credit in China is an irrevocable documentary letter of credit. Irrevocable letter of credit refers to the letter of credit that the issuing bank may not modify or cancel without the consent of all parties concerned (namely, the issuing bank, the applicant and the beneficiary) within the validity period after the letter of credit is issued; Transferable letter of credit means that at the request of the first beneficiary, the transferring bank transfers part or all of the transferable letter of credit to the second beneficiary for payment.

Transferable letter of credit can only be transferred once, that is, it can only be transferred from the first beneficiary to the second beneficiary. The transferred letter of credit cannot be transferred to any subsequent beneficiary at the request of the second beneficiary, but the first beneficiary is not regarded as the subsequent beneficiary. Transfer letter of credit refers to the letter of credit that has been changed from the transferring bank to the second beneficiary.

Introduction of China Bank Letter of Credit at Home and Abroad

(1) A letter of credit refers to a payment commitment made by a bank (issuing bank) according to the requirements and instructions of a customer (applicant) or on its own initiative with documents that meet the terms of the letter of credit, that is, with specified documents.

1. Pay to the third party (beneficiary) or its designated person, or accept and/or pay the draft drawn by the beneficiary;

2. Authorize another bank to pay, or accept and pay bills of exchange;

3. authorize another bank to negotiate.

In short, a letter of credit is a written document issued by a bank with a conditional payment commitment.

5. Domestic letter of credit is an irrevocable and non-transferable documentary letter of credit.

6. Domestic letters of credit should be handled in Chinese.

7. Domestic letters of credit are only for transfer settlement, and cash withdrawal is not allowed.

(2) A domestic letter of credit refers to a payment commitment issued by an issuing bank according to the applicant's application and paid by documents conforming to the terms of the letter of credit.

The above contents are for your reference. Please refer to the actual business regulations.

If you have any questions, please contact online customer service of Bank of China.

You are cordially invited to download and use China Bank Mobile Banking APP or China Bank Cross-border GO APP to handle related business.

Can a letter of credit be settled by transfer or cash?

1. There are two kinds of letters of credit in China: one is an international letter of credit for international trade settlement that is open to the outside world; One is domestic letter of credit, which is used for domestic trade settlement.

2. Both letters of credit can only be used for transfer settlement, and cash cannot be withdrawn.

3. According to the foreign exchange policy, an international letter of credit can be deposited in the foreign exchange current account if it is not settled after payment. The money in the current account can only be withdrawn if it is used for going abroad on business and other purposes, and the materials that meet the requirements are submitted and approved. This withdrawal rule is very strict. Trade payment can be settled in cash, but it is not a letter of credit business.

4. For domestic letters of credit, the People's Bank of China clearly stipulates that cash cannot be withdrawn.

Extended data

A letter of credit is a conditional payment promise of a bank and a written guarantee document issued by the issuing bank to the beneficiary at the request and instruction of the applicant. Within a certain period of time and a specified amount, the issuing bank will pay as long as the documents submitted by the beneficiary meet the terms of the letter of credit.

1. The issuing bank is the party that applies to the designated bank to open a letter of credit. In international trade, it is usually the importer. The issuer is the initiator of the letter of credit business. When the issuer applies to the bank to open a letter of credit, it needs to fill in the application form and pay the deposit for opening a letter of credit.

2. Issuing bank/issuing bank), that is, the bank entrusted by the applicant to open a letter of credit. The issuing bank is generally the bank where the importer is located. The basis for opening a letter of credit is the application form filled out by the applicant. Once a letter of credit is issued, the issuing bank bears the main responsibility for payment, and its payment is final and cannot be recovered once it is paid. The issuing bank may refuse to pay documents that appear to be inconsistent with the terms of the letter of credit.

3. Beneficiary (beneficiary), that is, the person who has the right to use the letter of credit, is usually the exporter. After receiving the letter of credit, the beneficiary should check it according to the contract. For a letter of credit that does not conform to the contract, the applicant can be asked to correct it through the issuing bank.

4. advisory bank refers to the bank entrusted by the issuing bank to notify the beneficiary of the letter of credit, usually the bank where the beneficiary is located. The advising bank is only responsible for advising or forwarding the letter of credit to the beneficiary, and has no obligation to negotiate or pay.

5. The negotiating bank is the bank that purchases the drafts and/or documents submitted by the beneficiary according to the terms of the letter of credit. It can be a notification line. If the negotiating bank finds that the documents submitted by the beneficiary are not in conformity with the terms of the letter of credit, it may refuse to negotiate. If the negotiating bank refuses to pay after negotiation with the issuing bank, the negotiating bank may recourse against the beneficiary.

6. The paying bank is the bank that performs the payment obligation, usually the issuing bank or its branch, or another bank designated by the issuing bank. The paying bank may refuse to pay the documents that are inconsistent with the terms of the letter of credit, but its payment is final. Once paid, even if it is paid by mistake, there is no recourse to the beneficiary and the negotiating bank.

7. Confirming bank refers to the bank that confirms the letter of credit at the request of the issuing bank. It can be the advising bank or the third bank. The capital of the confirming bank is generally higher than that of the issuing bank. The confirming bank may refuse to pay the documents that are inconsistent with the terms of the letter of credit, but its payment is final, even if it is paid by mistake, there is no recourse.

8. Accepting bank: The paying bank of the time draft accepts the draft when the beneficiary submits the documents that meet the terms of the letter of credit, and becomes the accepting bank. Once the accepting bank accepts the bill, it assumes the responsibility of payment due.

9. Reimbursement bank, also known as clearing bank, refers to the bank designated by the issuing bank in the letter of credit to pay off the advance payment to the paying bank or negotiating bank. After compensation, the reimbursing bank claims from the issuing bank, but it does not accept the documents and does not review them, so its payment is not final.