Parties to Letter of Credit
Accepting bank : the bank that indicates acceptance of the terms of the draft drawn under a credit by dating, signing across its face and showing the maturity date. In Canada, unless otherwise specified in the credit, the due date is increased by three business days, known as days of grace. On the maturity date, the draft is paid by the accepting bank.
Advising bank : the bank in the beneficiary's country or location to which the credit is forwarded. The advising bank, unless otherwise requested, advises the credit to the exporter without any obligation to pay drawings under the credit.
Applicant : the importer on whose behalf the credit is issued.
Beneficiary : the exporter in whose favour the credit is issued.
Confirming bank : a bank that, at the request of the issuing bank, joins in guaranteeing that drawings under the credit will be honoured, provided the documentation is in order.
Drawee bank : the bank on which the drafts specified in the credit are drawn.
Issuing Bank : the bank that acts on behalf of the applicant, issuing the credit and undertaking to honour the beneficiary's claims. Such claims are to be honoured without recourse to the exporter, provided the terms and conditions have been met.
Negotiating bank : the bank that elects to negotiate or advance funds against the documents, presented by the beneficiary, that are in accordance with the credit.
Paying bank : the bank authorized by the issuing bank to honour sight or deferred payments under the terms specified in the credit. A deferred payment relates to a term drawing when a draft is not used.
Presenter : the remitting bank (or beneficiary) that forwards the documents directly to the issuing bank to obtain settlement.
Reimbursing bank : the bank authorized by the issuing bank to reimburse the drawee bank or other banks submitting claims under the terms of the credit.
Remitting bank : the bank that submits documents and possibly drafts to the issuing bank for settlement.
Transferring bank : as specified in the credit, the bank that can transfer a documentary credit from one beneficiary to another at the request of the first beneficiary.
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