A confirming bank is a financial institution that offers extra security by backing a Standby Letter of Credit (SBLC) issued by another bank. This means the confirming bank guarantees payment to the seller or exporter if the buyer or importer doesn’t meet their obligations.
After the confirming bank confirms the SBLC, it informs the beneficiary, providing reassurance that the SBLC now includes the additional guarantee from the confirming bank.
The confirming bank’s responsibility under the confirmed SBLC remains in effect until the SBLC's specified expiration date. Once the SBLC expires, the confirming bank’s obligation ends, and the SBLC is considered closed.
How to Create an Outgoing Standby LC with Confirmation in RIVO
Create an standby LC:
Home ->Outgoing Standby LC -> Issuance
To add Confirmation Please follow the steps
In the Card Name field, under Should a local bank be involved?, follow these steps:
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- Click 'Yes' under the advice section.
- Available with: Select the appropriate option from the dropdown menu.
- Confirmation Instruction: Choose 'Confirm'/ 'May add' from the dropdown list.
- Has Advising Bank added confirmation?: Select 'Yes'.
Ensure all mandatory fields in all other cards are completed and then sign the issuance transaction.
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