Details on Parties and Procedures
•
The Issuing (Buyer's) Bank
•
Upon receiving the buyer's application,
the opening bank
checks the credit of the applicant, determines whether cash
security is necessary, and scrutinizes
the contents of the
application to see whether they generally are consistent
with national and international banking and legal
requirements. If the application is satisfactory to the bank,
the buyer and the opening bank will sign an agreement to
open a documentary credit. The credit must be written and
signed by an authorized person of the issuing bank.
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Details on Parties and Procedures
•
The Issuing (Buyer's) Bank
•
The issuing bank usually sends
the original documentary
credit to the seller (called the beneficiary) through an
advising bank, which may be a branch or correspondent
bank of the issuing (opening) bank. The seller may request
that a particular bank be the advising bank, or the buyer's
bank may select one of its
correspondent banks in the
seller's country.
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