What is red clause letter of credit?

IN red clause letter of credit the applicant(buyer)authorizes the confirming bank or any other nominated bank to pay a specified amount to the beneficiary.this clause was traditionally wriiten in red so it was called as red caluse letter of credit.

this type of lc would part finance the middle men r the dealers of the beneficiary and the buyer may be willing to have concessions on his pament.

this type of lc is hevily used in fur industry in China & Australia .