1
ApplicantUsually the buyerAsks for the LC.
Who is Who in an LC?
Learn the buyer, seller and bank roles without memorising jargon.
See the main people first
This gives you the big picture before you read the role details below.
2
Issuing bankThe buyer's bankIssues the LC.
3
Advising bankThe receiving bankPasses the LC to the seller.
4
BeneficiaryUsually the sellerShips and presents documents.
5
Confirming bankOptional extra bankAdds its own undertaking when requested.
Key point: the bank deals with documents. It does not inspect the goods like a buyer would.
Applicant
The applicant is the party that asks for the LC to be issued.
In a normal sale, the applicant is usually the buyer.
Beneficiary
The beneficiary is the party in whose favour the LC is issued.
In a normal sale, the beneficiary is usually the seller.
Issuing bank
The issuing bank issues the LC at the request of the applicant.
Its undertaking depends on the LC terms and the rules that apply.
Advising bank
The advising bank receives the credit through the banking channel and advises it to the beneficiary.
Advising is not automatically the same as adding confirmation.
Confirming bank
If confirmation is added, the confirming bank adds its own undertaking in addition to the issuing bank's undertaking.
Confirmation is a separate concept from simple advice.
Remember thisApplicant = usually buyer. Beneficiary = usually seller.
Lesson check0 / 2 answered · 0 correct
Check 1
Who normally asks the bank to issue the LC?
Check 2
Is an advising bank automatically a confirming bank?
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