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A Letter of Credit Promissory Note is primarily utilized in international trade financing transactions where additional payment security is required beyond a standard Letter of Credit. This document type is particularly relevant in the Pakistani market where it provides an extra layer of security for cross-border transactions. It combines the payment assurance of a Letter of Credit with the negotiability and enforcement benefits of a promissory note under Pakistani law. The document typically includes specific reference to the underlying Letter of Credit, detailed payment terms, and may be used either for single payment obligations or structured payment schedules. It must comply with both the Negotiable Instruments Act, 1881, and banking regulations overseen by the State Bank of Pakistan, while also adhering to international banking practices such as the UCP 600 where applicable. This instrument is especially valuable in situations where the beneficiary requires an additional, independently enforceable payment obligation that can be negotiated or discounted if needed.

1. Date and Place of Execution: Clearly stated date and location where the promissory note is executed, essential for legal validity

2. Unconditional Promise to Pay: Clear statement of absolute and unconditional promise to pay a specific sum

3. Letter of Credit Reference: Details of the underlying Letter of Credit including LC number, issuing bank, and beneficiary

4. Payment Terms: Specific amount, currency, and date(s) of payment

5. Maker Information: Full legal name and address of the party making the promise to pay

6. Payee Information: Full legal name and address of the party to whom payment is to be made

7. Signature Block: Space for maker's signature, witness signatures, and any required stamps