Okuzeka
International Trade vocabulary · Payment Methods and Letters of Credit

Issuing bank

Meaning in international trade, with examples

nounCommon term

In international trade, issuing bank means: The buyer's bank that opens a letter of credit and gives its own promise to pay if the seller presents complying documents.

In Turkish: amir banka, akreditifi açan banka

How it is used

One of the key parties in every L/C, also called the opening bank. Under an L/C the seller's main risk is the issuing bank and its country, which is why some sellers ask another bank to confirm the credit.

Example sentences

  1. The issuing bank is a small local bank we do not know, so we asked for confirmation.

  2. The issuing bank has up to five banking days to examine the documents.

Common collocations

  • issuing bank's undertaking
  • opening bank
  • reimbursement from the issuing bank
  • issuing bank's country
  • 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.
  • 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.
  • confirming bankA 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.
  • applicantIn a letter of credit, the buyer who asks its bank to open the credit in favour of the seller and who will pay the bank in the end.

More terms: Payment Methods and Letters of Credit

Practise with graded reading

Reading at the right level is the fastest way to make new words stick. Pick free English books by level: