Single L/C that covers multiple-shipments over a long period
. Instead of arranging a new L/C for each separate shipment
, the buyer
establishes a L/C that revolves either in value
(a fixed amount
is available which is replenished when exhausted) or in time (an amount is available in fixed installments over a period such as week
, or year). L/Cs revolving in time are of two types: in the cumulative type
, the sum unutilized in a period is carried over to be utilized in the next period; whereas in the non-cumulative type, it is not carried over.