Issuing Bank vs Advising Bank: What Each Bank Actually Does
The difference between the issuing bank and the advising bank in a Letter of Credit.
Reviewed by LCCheck team (owner-approved) · 2026-10-12
Short answer
The issuing bank creates the Letter of Credit at the buyer's request and gives the payment undertaking (UCP 600 Art. 7). The advising bank, usually in the seller's country, passes the credit to the seller after checking its apparent authenticity (Art. 9) — but takes on no payment obligation unless it also confirms.
| Issuing bank | Undertakes to pay (Art. 7) |
|---|---|
| Advising bank | Checks apparent authenticity (Art. 9) |
| Advising = paying? | No, unless it confirms |
Issuing bank
- Issues the MT700.
- Examines documents.
- Pays or reimburses on a complying presentation.
Advising bank
- Receives and authenticates the credit.
- Passes it to the beneficiary.
- May also act as nominated or confirming bank, if agreed.
Sources
General guidance, not legal advice. Your bank examines documents independently.
Related guides
Check an LC before shipping
Free snapshot in under a minute. No account needed.
Upload your Letter of Credit
PDF · up to 25 MB