Irrevocable Letter of Credit

An Irrevocable Letter of Credit is a payment agreement between a buyer (importer) and buyer’s bank.

What is Irrevocable Letter of Credit ?
An Irrevocable Letter of Credit is an agreement between a buyer and buyer’s bank wherein the bank agrees to pay the seller (exporter) as soon as certain conditions are met. Since this letter of credit is irrevocable, it guarantees the seller that the payment will be made and the buyer that the goods will be delivered.