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Trading Terms

Discrepancy

In the world of finance, understanding documentary credit is crucial. It refers to a payment method where a bank guarantees payment to a seller upon receipt of documents from the buyer. However, discrepancies can arise when the presented documents do not align with the credit terms. These discrepancies can include errors, contradictions, or omissions. In such cases, the bank will not release payment unless the buyer agrees to amend the credit or waive objections. This highlights the importance of carefully reviewing and adhering to the terms of a documentary credit.
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