In trade, especially foreign trade, a seller often does not know the buyer and fears non-payment. Banks solve this by lending their own credit standing to the buyer through a written undertaking.

A letter of credit is a document issued by the buyer's bank at the buyer's request, promising to pay the seller a stated sum once the seller presents the documents that prove the goods were shipped as agreed. The bank therefore guarantees payment on behalf of the buyer.

A commercial bill (bill of exchange) is drawn by the seller on the buyer and is not a bank guarantee. A bank draft is a prepaid instrument for remitting money, bought by paying the amount in advance; it does not guarantee a future payment. A credit slip (pay-in slip) is only the form used to deposit money into an account.

Letter of credit option is correct.