What is the counseling bank?

Advisory bank is used when the party issues a party in another country. In this case, it is a consulting bank by a bank that advises or draws attention to the admission party that a letter of credit is available. Given that the main purpose of the bank makes the exporter know that the letter has been issued, these banks are often called the bank notice. This system is a common way for people in different countries to send goods across boundaries by securing both parties that the other party with a result. In almost any case, the Counseling Bank is used in the sales agreement between the parties in other countries. The process begins when the importer buys goods outside his country. To ensure that money is available, the importer of the importer requires his bank to issue a letter of credit. When the issuing bank sends the word exporter consulting bank that the money is ready, the goods are taking place.

Using this process both sides can deal with safetyIt is, even if they differ in their countries, even if the laws on purchasing and selling differ. The letter means that the money exists and will be paid, but the payment will not occur until the product comes. Until then, money exists in limbo; The issuing bank keeps it separately from both sides. If there is a dispute, none of the parties can claim the money until the problem is resolved.

In most cases, the exporter chooses an advisory bank. This bank is usually one that the exporter has a relationship with, such as the company's primary bank. Advisory bank often limits the importer to the selected number of banks in his country. This often means that the importer must use a bank with which he does not have a personal relationship. This often causes a slight distortion of an exporter.

The relationship between the exporter and the consulting bank often means that it often plays other roles. It is also a confirmation bank to confirm that there is a letter of credit. If this bank is going through the sale confirmation, then it is coming upThe bank. Finally, if it gives the exporter money intended in the letter of credit, then it is also a paying bank.