LC Discrepancies 2025 India – Common Mistakes & How Exporters Can Avoid Them

When I first started learning about international trade, I thought Letters of Credit (LC) were foolproof — a guarantee that payment was 100% safe. But once I worked with real exporters, I realized that LC discrepancies can turn the safest deal into a stressful waiting game.

I’ve seen shipments delayed for weeks just because of a small typo on the invoice or because the bill of lading date didn’t match the one mentioned in the LC. These aren’t big frauds — they’re simple mistakes that cost exporters time, money, and trust.

That’s why I decided to write this blog on LC Discrepancies 2025 India, not as a textbook explanation, but as something every Indian exporter can relate to and learn from.

What Exactly Are LC Discrepancies?

In simple words, an LC discrepancy happens when the documents submitted by the exporter don’t match the conditions written in the Letter of Credit.

Even small differences — like a missing signature or a mismatch in goods description — can lead banks to reject the documents or delay payment.

From what I’ve seen, these discrepancies generally fall under three categories: Fundamental, Technical, and Common. Let’s break them down with examples I’ve personally encountered or heard about from exporters.

1. Fundamental Discrepancies

These are serious errors that directly violate key LC terms or international banking rules like UCP 600. Banks rarely overlook these, and they often result in rejection.

Real Examples:

• Shipment made after the LC’s latest shipment date.
• Invoice amount exceeding the LC value.
• Documents presented after the LC expiry date.
• Shipment sent to a different port than what the LC specifies.

A friend of mine from Tirupur, who exports garments to Europe, once missed his LC payment because his freight forwarder shipped goods one day late. The bank refused payment, and he had to renegotiate with the buyer.

How to Avoid:

• Go through every LC term the moment you receive it.
• Coordinate shipment schedules carefully with your logistics team.
• Always submit documents at least 2–3 days before the expiry date.

2. Technical Discrepancies

These occur even when the shipment is perfect but the documentation has errors or missing elements.

Examples I’ve Come Across:

• Names or addresses not matching exactly across documents.
• Missing signatures, incorrect dates, or wrong stamps.
• Title differences like “Packing Note” instead of “Packing List.”
• Missing notations such as “Freight Prepaid” on the Bill of Lading.

A Rajkot-based machinery exporter once told me that his LC payment got delayed by 20 days because his invoice had “Rajkot Machinery Works Pvt Ltd” while the LC mentioned “Rajkot Machinery Pvt Ltd.” That one extra word “Works” cost him ₹40,000 in amendment and courier fees.

How to Avoid:

• Use standard document templates aligned with ISBP 745.
• Double-check spellings, dates, and Incoterms.
• Get an experienced documentation officer or consultant to verify papers before submission.

3. Common Discrepancies (Everyday Mistakes)

These are the small yet frequent issues that exporters face daily.

Common Issues:

• Typographical or spelling mistakes.
• Inconsistent dates between invoice and Bill of Lading.
• Missing copies of documents.
• Invoice amount not matching LC value or currency.

One exporter I met at a trade fair in Mumbai said, “I used to think a single spelling mistake can’t cause trouble — until my bank made me resend every corrected document!”

How to Avoid:

• Create a document checklist before submission.
• Review all documents side-by-side for consistency.
• Keep scanned copies of every version to avoid confusion.

How to Check Authenticity of a Letter of Credit (LC) 2025

Before even worrying about discrepancies, make sure your LC itself is genuine.
Here’s what I’ve learned (and always advise others):

1. Verify via SWIFT MT700: Ensure your advising bank receives the LC directly through authenticated SWIFT channels.
2. Check the Issuing Bank’s SWIFT Code: Verify it on the SWIFT/BIC directory to confirm it’s legitimate.
3. Match LC Details with Your Contract: Shipment dates, currency, Incoterms, and product details should be identical.
4. Request Confirmation from a Prime Bank: If the LC is from a lesser-known bank, ask for confirmation from HSBC, Citibank, or Standard Chartered.

How to Avoid LC Discrepancies – Step-by-Step (2025)

After working with several exporters, I’ve noticed a few habits that almost guarantee smoother transactions:

• Read the LC thoroughly the moment you receive it.
• Ask for amendments immediately if you find impractical terms.
• Use uniform document templates across all departments.
• Cross-verify every figure — date, quantity, value, currency.
• Submit documents early to leave time for corrections.
• Stay in touch with your bank and forwarder throughout the process.
• Consult trade finance experts for high-value or first-time exports.

Best Practices for Exporters in 2025

If you want zero LC headaches, build discipline into your export routine.

✅ Maintain clear written agreements covering LC terms.
✅ Always work with reputed Indian banks like SBI, HDFC, or Axis.
✅ Follow UCP 600 and ISBP 745 standards strictly.
✅ Send shipment updates to both buyer and bank regularly.
✅ Conduct periodic internal LC audits to improve compliance.

FAQs on LC Discrepancies 2025 India

Conclusion

In my experience, LC discrepancies are not about dishonesty — they’re about discipline. Exporters who slow down, double-check, and treat documentation seriously rarely face issues.

In 2025, with tighter compliance and smarter banking systems, avoiding LC discrepancies is all about awareness and precision.

If you’re an Indian exporter handling LCs regularly, I’d say this: read every clause like your payment depends on it — because it does.

For a complete understanding of how Letters of Credit work, read our main guide:

Letter of Credit (LC) 2025 in India – Complete Guide for Exporters