Advising bank
# Advising bank

Part of a series on financial services :

Banking :

Types of banks

Advising

Banq

Bulge bracket

Central

Commercial

Community development

Cooperative

Credit union

Custodian

Depository

Development

Direct

Export credit agency

Investment

Industrial

Merchant

Middle market

Mutual savings

National

Neobank

Offshore

Participation

Payments

Postal savings

Private

Public

Retail

Savings

Savings and loan

Universal

Wholesale

Bank holding company

Lists of banks :

Accounts · Cards

Accounts

Christmas club

Deposit

Money-market

Savings

Time deposit (Bond)

Transaction (checking / current)

Cards

ATM

Credit

Debit :

Funds transfer

Electronic

Bill payment

Mobile

Automated clearing house

Cheque

CIPS

Giro

SPFS

SWIFT

Wire :

Terms

Automated teller machine

Bank regulation

Loan

Mobile banking

Money creation

Bank secrecy

Ethical banking

Fractional-reserve banking

Full-reserve banking

Islamic banking

Private banking :

Related topicsFinancial market (participants)

Corporate finance

Personal finance

Public finance

Financial law

Financial regulation

List of banks :

Category

Commons

Portal :

vte :

An advising bank (also known as a notifying bank) advises a beneficiary (exporter) that a letter of credit (L/C) opened by an issuing bank for an applicant (importer) is available. An advising bank's responsibility is to authenticate the letter of credit issued by the issuer to avoid fraud. The advising bank is not necessarily responsible for the payment of the credit which it advises the beneficiary of. The advising bank is usually located in the beneficiary's country. It can be (1) a branch office of the issuing bank or a correspondent bank, or (2) a bank appointed by the beneficiary. An important point is the beneficiary has to be comfortable with the advising bank.

In case (1), the issuing bank most often sends the L/C through its branch office or correspondent bank to avoid fraud. The branch office or the correspondent bank maintains specimen signature(s) on file where it may counter-check the signature(s) on the L/C, and it has a coding system (a secret test key) to distinguish a genuine L/C from a fraudulent one (authentication).

In case (2), the beneficiary can request the applicant to specify his/her bank (the beneficiary's bank) as the advising bank in an L/C application. In many countries, this is beneficial to the beneficiary, who may avail themselves of the reduced bank charges and fees because of special relationships with the bank. Under normal circumstances, advising charges are standard and minimal. In addition, it is more convenient to deal with the beneficiary's own bank over a bank with which the beneficiary does not maintain an account.

* This bank and insurance-related article is a stub. You can help Wikipedia by expanding it.
* v
* t
* e
