1.3 Main Parties involved o Applicant(Buyer/importer): Applies to the Issuing Bank for a letter of credit in favor of the beneficiary(seller). Also as known as accountee or accreditor As for the importer, he is only requested to pay a certain proportion of deposit instead of the total amount of the credit at the time of application 经贸学觊国贸系 王学◎
经贸学院国贸系 王学惠 © 1.3 Main Parties involved l Applicant (Buyer/importer): Applies to the Issuing Bank for a letter of credit in favor of the beneficiary (seller). Also as known as accountee or accreditor. As for the importer, he is only requested to pay a certain proportion of deposit instead of the total amount of the Credit at the time of application
Issuing Bank o Opening bank The bank who issues the letter of credit. Gives the primary payment undertaking of the letter of credit Question: What factors should the issuing facilities to his customer? granting DC bank consider before 经贸学觊国贸系 王学◎
经贸学院国贸系 王学惠 © Issuing Bank l Opening Bank: The bank who issues the letter of credit. Gives the primary payment undertaking of the letter of credit. Question: What factors should the issuing bank consider before granting DC facilities to his customer?
Answer Credit standing of customer Cash cover as security Exchange risk Nature and control of goods Type of credit 经贸学觊国贸系 王学◎
经贸学院国贸系 王学惠 © Answer: • Credit standing of customer • Cash cover as security • Exchange risk • Nature and control of goods • Type of credit
Advising bank(notifying ban Communicates with the seller about the letter of credit verifies that the l c is genuine, but gives no payment undertaking of its own. It can also be confirming bank 经贸学觊国贸系 王学◎
经贸学院国贸系 王学惠 © Advising bank(notifying bank) Communicates with the seller about the letter of credit. Verifies that the L/C is genuine, but gives no payment undertaking of its own. It can also be confirming bank
Beneficiary(Exporter/Seller) o The party to whom payment will be made. The letter of credit gives the beneficiary the assurance of payment by the issuing bank provided documents are presented which comply with all the terms of the l/c 经贸学觊国贸系 王学◎
经贸学院国贸系 王学惠 © Beneficiary (Exporter/Seller) l The party to whom payment will be made. The letter of credit gives the beneficiary the assurance of payment by the issuing bank provided documents are presented which comply with all the terms of the L/C