Negotiating Bank

Negotiating Bank in International Trade

Meaning of Negotiating Bank, according to the Dictionary of International Trade (Global Negotiator): In a letter of credit transaction, the bank that:

receives and examines the seller's documents for adherence to the terms and conditions of the letter of credit, gives value to the seller, so long as the terms of the credit have been met, and forwards them to the issuing bank (the buyer's or importer bank).

Depending upon the of credit, the negotiating bank will either credit or pay the seller/exporter immediately under the terms of the letter of credit, or credit or pay the exporter once it has received payment from the issuing bank. See advising bank; issuing bank.