Restricted vs Freely Negotiable Letters of Credit
The difference between a credit available with one named bank and one available with any bank.
Reviewed by LCCheck team (owner-approved) · 2026-10-12
Short answer
A restricted credit is available only with a named nominated bank (field 41A/41D names that bank). A freely negotiable credit is 'available with any bank', so the beneficiary can present through its own bank (UCP 600 Art. 6(a)). Restriction affects where you present and which bank's opening hours and location count for the deadline.
| Field | MT700 41A/41D |
|---|---|
| Rule | UCP 600 Art. 6(a) |
| Freely available | 'Any bank' |
Restricted
- One named bank only.
- Presentation elsewhere may delay payment.
- Often paired with confirmation by that bank.
Freely negotiable
- Present through your own bank.
- More flexibility for the beneficiary.
Check
- Who is named in 41A/41D.
- Place of expiry (31D) versus place of availability.
Sources
- ICC — UCP 600 (Uniform Customs and Practice for Documentary Credits)
- Swift — MT700 Issue of a Documentary Credit (category 7 standards)
General guidance, not legal advice. Your bank examines documents independently.
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