What Is an Advising Bank?

The notifying bank is the party that settles the letter of credit, and issues the notice to the exporter on behalf of the issuing bank. The notifying bank is usually the bank where the exporter is located. After receiving the letter of credit from the issuing bank, the notifying bank shall promptly and correctly notify the beneficiary according to the requirements of the issuing bank and prove the authenticity of the letter of credit. Notify the bank that neither the issuing bank nor the beneficiary is obligated to negotiate or pay on its behalf. ^[1]

Notify the bank

The notifying bank is the party that settles the letter of credit, and issues the notice to the exporter on behalf of the issuing bank. The notifying bank is usually the bank where the exporter is located. After receiving the letter of credit from the issuing bank, the notifying bank shall promptly and correctly notify the beneficiary according to the requirements of the issuing bank and prove the authenticity of the letter of credit. Notify the bank that neither the issuing bank nor the beneficiary is obligated to negotiate or pay on its behalf. ^[1]

Such as

Notify bank to prove authenticity of L / C

If the advising bank decides to notify the letter of credit, it must carefully review the authenticity of the letter of credit. If the advising bank still decides to notify the beneficiary to the beneficiary, the advising bank must check whether the letter of credit is consistent with the letter of credit, and the letter of credit issued by telegram or telex must check whether the secrecy is consistent. If it does, the advising bank must stamp the letter of credit with the seal "confirmed" or "secret has been pledged"; if it does not, the advising bank must stamp the letter of credit with "confirmation does not match" or "secret does not match" The original seal of the letter of credit stamped with the above seal shall be notified to the beneficiary in time. The advising bank may contact the bank issuing the letter of credit by telephone, fax, telegram, telex, or other means, or ask the bank that received the instruction to inquire whether the bank issued the letter of credit. If the advising bank has reviewed and inquired the letter of credit, and has determined that the letter of credit is authentic, it shall be stamped with the seal of "signature has been signed" or "secret letter has been signed", and the beneficiary shall be notified with an official document or sender. If the advising bank has reviewed the letter of credit and inquired the issuing bank or the bank that received the instruction through telecommunications, the answer is "The bank has not issued this letter of credit, this letter of credit is purely forged." The bank shall notify the beneficiary of this result without delay. If the advising bank is unable to verify the authenticity of the letter of credit, it shall promptly inform the beneficiary and instruct the beneficiary not to use the letter of credit to prepare goods for shipment.

The advising bank decides not to notify the credit, and it must inform the issuing bank without delay. If the advising bank cannot determine the authenticity of the credit, it must inform the issuing bank without delay.

Notify banks not to take responsibility

If the instructions received for the notification, confirmation or modification of the letter of credit are incomplete or unclear, the bank that is required to execute the instruction may give the beneficiary a preliminary notice for reference only and shall not be held responsible. The notice should clearly state that this notice is for reference only, and the advising bank is not responsible, but the advising bank must inform the issuing bank of the action taken and request the issuing bank to provide the necessary content. Only when the advising bank receives complete and clear instructions from the issuing bank and is ready to execute, the credit party can notify, confirm or modify.

Unless the issuing bank specifies otherwise in its authorization or request for confirmation, the advising bank may not confirm and notify the beneficiary of the unconfirmed letter of credit.