Letter of Credit functionality presently available in Microsoft Dynamic 365 is insufficient to handle all the business scenarios which is widely followed by many organizations. Following business scenarios which is common in any industry while dealing with letter of credit.
Lets say the purchase Order amount is 10,000USD. The customer may need to pay 10% advance at the time of releasing the PO and the rest of the payment will be letter of credit. Many of my customers have the above scenarios, but as per my knowledge this can not be handled in MS D365.
Letter of Credit based on Cash guarantee
There are certain cases Banks give a letter of guarantee based on the amount available in the client's account. It is called Cash LG as the guarantee is the amount available in the client's account. This also a gap in Microsoft D365.