Term:
Red clause
Definition:

In a documentary credit, special clause included which allows the seller to obtain an advance from the correspondent bank to finance the manufacture or purchase of goods to be delivered under the documentary credit. Liability is assumed by the issuing bank rather than the corresponding bank. It is called red clause because red ink used to be used to draw attention to the clause.

Domain:
Finance
Source:
World Bank: Glossary of Finance and Debt
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