Advising Bank

An Advising Bank is a financial institution that helps to facilitate international trade by confirming and communicating the details of a letter of credit. When a buyer and seller engage in a transaction, the buyer's bank issues the letter of credit to assure the seller of payment. The Advising Bank, typically located in the seller's country, verifies the authenticity of the letter and notifies the seller, ensuring they understand the terms. This role is crucial for building trust between the buyer and seller in cross-border transactions, as it helps reduce the risk of fraud and ensures smooth payment processes.