There are following parties to a Letter of
Credit.
(1) The buyer.
(2) The beneficiary.
(3) The issuing bank.
(4) The notifying bank.
(5) The negotiating bank.
(6) The confirming bank.
(7) The paying bank.
1. The Buyer: The
buyer who is the importer, applies to the bank for the opening of a Letter of
Credit.
2. The Beneficiary: The seller, who is the exporter, is the beneficiary of the Letter
of Credit.
3. The Issuing Bank: The bank which issues the Letter of Credit at the request of the buyer
is the issuing bank.
4. The Notifying Bank: The notifying bank is the correspondent bank situated in the same
place as that of the seller which advises the credit to the beneficiary.
5. The Negotiating Bank: It is the bank which negotiates the Bills or Drafts under the Letter
of Credit.
6. The Confirming Bank: It is the bank the seller insists that the credit must be confirmed
by it.
7. The Paying Bank: The paying bank is the bank on which the bill or draft is drawn. It
can be the confirming bank, the issuing bank or the notifying bank.
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