Letter of credit deposit, also known as letter of credit deposit, refers to the money deposited into the bank's letter of credit deposit account by an enterprise that adopts the letter of credit settlement method to obtain a letter of credit. The enterprise shall pay the deposit to the bank according to the amount stated in the first copy of the incoming bill returned by the bank and the letter of credit notice and related documents submitted by the issuing bank, debit the account and credit the account.

The bank has the right to require the applicant to hand over a certain amount of funds or other forms of property as a guarantee for the bank to carry out its instructions. The bank will freeze the funds in its account as the deposit for card opening. If only part of the deposit can be deposited, and this part of the deposit is less than the amount of the letter of credit, the applicant can apply for a standby loan from the bank and sign a standby loan contract with the bank.

Extended data:

Credit bonds are specially set up for companies with foreign trade, which can guarantee the payment of overseas trade partners. Credit bond is an international settlement transaction in the form of credit guarantee.

In other words, when a company opens a letter of credit in a bank, it must provide a certain amount of assets to the bank as a guarantee. If the letter of credit deposit is insufficient, the company can apply for a standby loan to ensure that the letter of credit deposit has enough funds to open a letter of credit.

Margin ratio of letter of credit:

1. If the letter of credit is urgently needed and the funds are sufficient, you need to pay the full deposit, so you don't have to go to the bank to grant the credit.

2. Some banks can apply for 4% to 10% without using the letter of credit urgently, depending on the bank you apply for. In this case, you must go to the bank for credit.

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