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.