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Practitioner view · Why banks say yes or no

Inside the Bank

See the checks that may happen before a bank issues, advises, confirms or finances an instrument.

1
Customer request

Relationship manager or trade-finance team receives the proposed transaction, amount, parties, purpose and wording.

2
KYC / AML / sanctions

Bank identifies customers and counterparties, screens sanctions/adverse information and assesses transaction purpose/source of funds as required.

3
Credit exposure

Bank checks the customer’s facility, collateral, cash margin, limits, tenor and whether the new undertaking fits approved credit.

4
Country / bank / product risk

Institution considers jurisdictions, correspondent/advising banks, product capability and internal risk appetite.

5
Legal and wording review

Non-standard guarantees, unusual BPU wording, transfer language, evergreen clauses or complex conditions may need specialist approval.

6
Pricing and fees

Issuance/confirmation/financing charges reflect exposure, tenor, collateral, operations and market conditions.

7
Maker / checker / authorisation

Trade operations prepare the transaction and separate authorised staff approve/release it according to bank controls.

8
Message release / advice

SWIFT or other authorised communication is sent. Receiving bank authenticates and handles it according to its own role and policy.

Remember thisA customer can request a message or undertaking. The bank decides whether it can issue it, in what wording, and on what credit/compliance terms.