Back-to-Back credit is a seller financing tool where seller goes to his bank for amendment of the master LC and get issued another LC in favor of the main supplier and also it is a LC where main buyer does not get to know that who is main supplier.
A transferable
letter of credit allows the beneficiary to act as a middleman and
transfer
his rights under a letter of credit
to another party or parties who may be
suppliers of
the
goods.
There are two major differences
between a documentary collection and a documentary credit: (1) the draft involved is not drawn by the seller (the "drawer") upon a bank for payment, but rather
on
the buyer itself (the "drawee"), and (2) the
seller's bank has no obligation to pay upon presentation but, more simply, acts as a
collecting or remitting bank on behalf of the seller, thus earning a commission for its services.