Advising Bank

Correspondent bank (usually in the exporter’s country) of an issuing bank (usually in the importer’s country) that receives a letter of credit (L/C) from the issuing bank for authenticating it and informing (‘advising’) the exporter (the L/C’s beneficiary) that a L/C has been opened by the importer in the exporter’s favor. The advising bank usually also takes on other roles in the transaction, such as (1) confirming the letter of credit (playing the role of the ‘confirming bank’), (2) accepting a bill of exchange by endorsing it (becoming the ‘accepting bank’) and/or, (3) paying the exporter on presentation of documents (becoming the ‘paying bank’ or ‘negotiating bank’).

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