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International Trade vocabulary · Payment Methods and Letters of Credit

Confirming bank

Meaning in international trade, with examples

nounCommon term

In international trade, confirming bank means: A bank, usually in the seller's country, that adds its own promise to pay to a letter of credit, so the seller does not depend only on the issuing bank.

In Turkish: teyit bankası, teyit eden banka

How it is used

Used when the seller is unsure about the issuing bank or its country. The confirming bank charges a confirmation fee, often paid by the seller. An L/C with this extra promise is called a 'confirmed L/C'.

Example sentences

  1. Our bank agreed to act as confirming bank for a fee of 0.8 percent.

  2. With a confirming bank in Turkey, we get paid even if the issuing bank delays.

Common collocations

  • act as confirming bank
  • confirmation fee
  • add confirmation
  • confirmed letter of credit
  • issuing bankThe buyer's bank that opens a letter of credit and gives its own promise to pay if the seller presents complying documents.
  • advising bankA bank in the seller's country that checks that a letter of credit appears genuine and passes it on to the seller, without promising to pay.
  • letter of creditA bank's written promise to pay the seller a set amount, provided the seller presents documents that meet the exact conditions of the credit within the stated time.
  • irrevocableDescribes a promise, such as a letter of credit, that cannot be changed or cancelled without the agreement of all the parties concerned.

More terms: Payment Methods and Letters of Credit

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