Definitions for "NEGOTIATING BANK"
A bank which is party to a Letter of Credit and which agrees to buy or sell Bills of Exchange or shipping documents.
A bank which negotiates a draft drawn under a letter of credit, provided the credit permits negotiation of drafts. Usually the negotiating bank is an unnamed bank that under the terms and conditions of the letter of credit is permitted, at its discretion, to advance funds to the beneficiary against the required documents.
Refers to any bank accepting the documents of a LC beneficiary and giving in exchange a value for those documents. In simple terms, the negotiating bank purchases (i.e. takes up) the letter of credit from the LC beneficiary, paying him either at a discount from the face valve of the documents or against a fees.