Negotiating Bank

A negotiating bank is a financial institution that reviews, verifies, and pays cheques or drafts presented by a seller’s bank in international trade. When goods are shipped, the seller’s bank sends documents to the buyer’s bank for examination. If everything complies with the agreement, the negotiating bank will release payment to the seller. Essentially, it acts as a trusted intermediary, ensuring that shipping documents and payment are handled securely and efficiently, facilitating international transactions by reducing risks for both buyers and sellers.