LC Application Terms,
Basic Process Flow
1. Importer will provide his LC Application to his bank
2. Importer money will be get blocked in his bank account. He can't withdraw the LC amount
3. The importer will forward that LC Draft to Exporter's bank
4. Exporter then ships the goods and prepare documents for exports (Hear bank can provide exporter a fund because importer amount is blocked and exporter will get it soon as he submits his original documents to his bank)
5. Exporter submits his original documents to his bank as demanded by the importer
6. The exporter's bank will forward that LC to importers bank
7. importer's bank will forward you the money.
Once the LC is open, importer cant cancels the deal, if importer can't pay then his bank has to pay from his reserve funds, so banks always block the funds of importer before opening the LC for the importer.
Please find the attachment of LC Specimen