It is significantly different than other payment options in international trade, mainly because of the fact that letter of credit is governed by banks.
As a result it is a vital importance to understand banks, their roles and responsibilities in order to act correctly under a letter of credit transaction.
Advising Bank is the bank that advises the letter of credit to the beneficiary.
Issuing bank, on the other hand, is the bank that issues a letter of credit at the request of an applicant or on its own behalf.
After making the definitions, we can now proceed to understand the key differences between advising banks and issuing banks.