On presentation of the documents called for under the letter of credit, provided they are in compliance with its terms, the advising/negotiating bank, in the case of an unconfirmed letter of credit, may pay/negotiate the draft.
In the case of a confirmed letter of credit, the confirming bank is obliged to honour the drawing without recourse to the beneficiary.
The advising/confirming/negotiating bank will claim reimbursement from the issuing bank.
On receipt of conforming documents, the issuing bank will also be responsible for checking documents and will charge the applicant’s account under the terms of the letter of credit application and agreement forms, effecting reimbursement to the negotiating bank.
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