A revolving documentary credit is one by which, under the terms and conditions thereof, the amount is renewed or reinstated without specific amendments to the documentary credit being required. The revolving documentary credit may be revocable or irrevocable, and may revolve in relation to time or value.
　　In the case of a documentary credit that revolves in relation to time, e. g. which is initially available for up to USD15, 000. 00 per month during a fixed period of time, say, six months, the documentary credit is
　　automatically available for USD15, 000. 00 each month irrespective of whether any sum was drawn during the previous month. A documentary credit of this nature can be cumulative or non-cumulative. If it is stated to be ’cumulative,’any sum not utilised during the first period carries over and may be utilised during a subsequent period. If it is ’non- cumulative,’ any sum not utilised in a period ceases to be available, that is, it is not carried over to a subsequent period. It must be remembered that under this kind of documentary credit and following this example, the obligations of the issuing bank would be for USD90,000.00, i.e. six revolving periods each for USD15, 000. 00. Thus while the face value of the documentary credit is given as USD15, 000. 00 the total undertaking of the issuing bank is for the full value that might be drawn.
　　In the case of a documentary credit that revolves in relation to value, the amount is reinstated utilisation within a given overall period of validity. The documentary credit may provide for automatic reinstatement immediately upon presentation of the specified documents, or it may provide for reinstatement only after receipt by the issuing bank of those documents or another stated condition.
　　This kind of documentary credit involves the buyer and the banks in an incalculable liability. For that reason, it is not in common use. To maintain a degree of control, it would be necessary to specify the overall amount that may be drawn under the documentary credit. Such amount would have to be decided by the buyer and the seller to meet their requirements, and would have to be agreed to by the issuing bank.
　　61. What’s the correct definition of revolving documentary credit?
　　A. A revolving documentary credit is one by which, under the terms and conditions thereof, the amount is reinstated without specific amendments to whichever kinds of credit the customer required.
　　B. A revolving documentary credit is one by which, under the terms and conditions thereof, the tenor is extended without specific amendments
　　to the documentary credit being required.
　　C. A revolving documentary credit is one by which, under the terms and conditions thereof, the amount is renewed with specific amendments to
　　the documentary credit being required.
　　D. A revolving documentary credit is one by which, under the terms and conditions thereof, the amount is reinstated without specific amendments to the documentary credit being required.
　　62. "Ceases to" in Line 11 probably means __________________.
　　A. "continue"
　　B. "suspend to"
　　C. "stop"
　　D. "carry over"
　　63. Which of the following statements is true?
　　A. The revolving documentary credit may revolve according to the amount and time.
　　B. A revolving documentary credit must be irrevocable.
　　C. A revolving documentary credit must be revocable.
　　D. The amount of a revolving documentary credit cannot be cumulated.
　　64. When is the amount reinstated in the case of a documentary credit that
　　revolves in relation to value?
　　A. Just on presentation of specified documents.
　　B. Only after the issuing bank receives those documents.
　　C. Under the stated condition.
　　D. All of above.
　　65. The documentary credit that revolves in relation to value isn’t commonly
　　used because ________.
　　A. the overall amount that may be drawn under the documentary credit has been specified
　　B. such credit involves the buyer and the bank in
　　an incalculable liabilities
　　C. it makes the issuing bank entail an incalculable liabilities.
　　D. the documentary credit may provide for reinstatement immediately and automatically.

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