L/C Issuing Bank
Issue L/C & request to Add Confirm
HSBC (L/C Confirming Bank)
USA Exporter (L/C Beneficiary)
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Forwarding Documentary Credit by Advising or Confirming Bank:
There are usually two banks involved in a documentary credit operation. The issuing bank and the 2nd bank, the advising bank, is usually a bank in the seller’s country. The issuing bank asks another bank to advise or confirm the credit. If the 2nd bank is simply “advising the credit”, it will mention that when it forwards the credit to seller, such a bank is under no commitment or obligation to pay the seller. If the advising bank is also “confirming the credit”, this mention that the confirming bank, regardless of any other consideration, must pay accept or negotiate without recourse to seller. Then the bank is called confirming bank also. •
Submission of Necessary Documents by Exporter to the Negotiating Bank:
As soon as the seller/exporter receives the credit and is satisfied that he can meet its terms and conditions, he is in a position to load the goods and dispatch them. The seller then sends the documents evidencing the shipment to the bank. Exporter will submit those documents in accordance with the terms and conditions as mentioned in L/C. Generally the documents observed by the foreign exchange department are:
Bill of exchange Commercial invoice Bill of lading / Air way bill / Truck receipt Certificate of origin Packing list Clean report of finding (CRF) Insurance cover note Pre-shipment certificate