A Letter of Credit (L/C) is an instrument or document issued by a bank guaranteeing the payment of a customer's drafts up to a stated amount for a specified period. It substitutes the bank's credit for the buyer's and eliminates the seller's risk. It is used extensively in international trade.
A registered check is a type of check issued by a bank for a customer who sets aside funds in a special register. It is used when the customer specifies his name, the payee's name, and the amount to be transferred. Similar to a money order, a registered check is beneficial for individuals who do not have a checking account at the bank.
