Bank Letter Of Credit Transactions Risk And Its Prevention,

Under the payment of letter of credit, which is treated as an important payment method during international trade settlement, bank is playing a significant role. Bank substituting the buyer's commercial credit for reliable bank credit itself, and undertaking the first-payment liability, has constituted the foundation of letter of credit system. So the main point of the paper is to protect lawful rights and benefits of bank at utmost in order to promote the positivism of bank to take part in international trade settlement and financing actions.The paper first analyzes bank's rights and responsibilities with different legal relationships on different exchange stages under payment mode of letter of credit in detail, discusses possible legal liabilities occurred to bank when carrying out the responsibilities incorrectly. Basing on aforementioned discussions, the author provides some reactions for bank to reduce risks and defend rights. Then the author makes some suggestions to perfect domestic legal system about the issues of letter of credit according to the research and hopes such viewpoints could be benefit for protection of the rights of bank.