Acceptance letter of credit process

The business process of letter of credit is as follows:

1. In the trade contract, the buyer and the seller agreed to use documentary letter of credit for payment, and the buyer informed the local bank (issuing bank) to open a letter of credit in favor of the seller;

2. The issuing bank requests another bank to advise or confirm the letter of credit, and the advising bank informs the seller that the letter of credit has been opened;

3. The seller shall ship the goods after receiving the letter of credit and ensuring that it can fulfill the conditions stipulated in the letter of credit;

4. The seller shall submit the documents to the designated bank, which will review the documents according to the letter of credit. If the documents meet the requirements of the letter of credit, the bank will make payment, acceptance or negotiation according to the provisions of the letter of credit;

5. Banks other than the issuing bank will send the documents to the issuing bank, and the issuing bank will pay the bank that has paid, accepted or negotiated in accordance with the letter of credit in the form agreed in advance after reviewing the documents;

6. After the buyer pays, the issuing bank will deliver the documents, and then the buyer will pick up the goods with the documents.

People's Republic of China (PRC) Commercial Bank Law

Article 44

Commercial banks should handle cash bills, acceptance bills, bills of exchange, entrusted collection and other settlement businesses within the prescribed time limit, and record the receipt and payment, and may not illegally hold bills, hold bills on their behalf or refund tickets. The time limit for recording cash, income and expenditure shall be published.