A more thorough explanation:

SL/C stands for standby letter of credit, which is a type of letter of credit used to guarantee a monetary or non-monetary obligation. It is issued by a bank at the request of a customer, and it promises to pay a third party (the beneficiary) if the customer fails to fulfill their obligation.

For example, if a construction company is hired to build a new office building, the client may require them to provide a standby letter of credit to ensure that the work is completed on time and to the agreed-upon standards. If the construction company fails to meet these requirements, the bank will pay the client the amount specified in the SL/C.

Another example is when a supplier requires a buyer to provide an SL/C to ensure payment for goods or services. If the buyer fails to pay, the bank will pay the supplier the amount specified in the SL/C.

Overall, an SL/C is a useful tool for managing risk in business transactions, as it provides a guarantee of payment in case of default or non-performance.