ABSTRACT
The IB will now enter into one or maybe two or more contracts. In implementing its instructions in its agency contract with the buyer, the IB will approach the seller’s bank which is sometimes already designated in its contract of agency with the buyer. This bank is known as an advising bank (AB). The AB will be asked by the IB to inform the seller/beneficiary that a credit has been opened by the IB in his favour. It may also be asked to take up the documents and make payment. In these circumstances it will be an advising/nominated bank. Note here that not in every case will an advising bank act also as the nominated bank and vice versa. In some cases the issuing bank will approach one of its branches in the beneficiary’s country to arrange for it to take up the documents and make payment.
