Page 231 - International Marketing

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BRILLIANT'S Export Management 233

2. Applicant’s/Importer’s Bank: The Parties to a Letter of
bank who issues or opens the letter of credit Credit
on behalf of the importer customer.
3. Exporter: Exporter is the beneficiary 1. Applicant/Importer
of the letter of credit who is entitled to review 2. Applicant’s/Importer’s
the payment of his bills account to the term Bank
of letter of credit. 3. Exporter
4. Intermediary/Confirming Bank: In- 4. Intermediary/Confir-
termediary bank is the bank usually a branch ming Bank
or the correspondent of the opening bank in 5. Paying/Negotiating
the exporting country through which the credit Bank
is advised to the exporter. If it merely advices/
informs towards the bill without any obligation on its part it is called the
Advising Or Notifying bank.
If the beneficiary bank adds its own undertaking to the credit while
advising it to be the beneficiary it becomes the confirming bank.
5. Paying/Negotiating Bank: The bank which negotiates the ben-
eficiary bills under the credit and pays for it is known as Paying/negotiat-
ing bank.
Liabilities/Responsibilities of the Parties to the Letter of
Credit
The responsibilities are as follows:
1. Applicant: The applicant should give precise details for opening
the letter of credit. The applicant should indemnify banks against rules
and regulations imposed by the foreign countries.
2. Issuing Bank: The issuing bank gives a conditional undertaking
and reimburses the negotiating bank against submission of the prescribed
documents. It should verify the documents presented under the credit
within seven banking days following the day of receipt of the documents
and if it observed any discrepancy in the documents it will refuse reim-
bursement.
3. Advising Bank: The bank advising the letter of credit acts without
any engagement on its part but will take reasonable care to check the
authenticity of the credit. If incomplete or unclear instructions are received,
it will give the preliminary information to the Beneficiary without any re-
sponsibility on its part.
4. Confirming Bank: When the confirmation to accredit is added by
a confirming bank at the specific request of the opening bank it consti-
tutes a definite, equitable undertaking on the part of the confirming bank in