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HomeHomework HelpfinanceInternational Standard Banking Practice

International Standard Banking Practice

A set of guidelines and standards developed by the International Chamber of Commerce (ICC) that provides a framework for banks to examine documents presented under letters of credit, with the goal of achieving consistency and reducing discrepancies in the examination process

intermediate
3 hours
Finance
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Overview

International Standard Banking Practice (ISBP) is essential for ensuring that documents presented under documentary credits are examined consistently and accurately. It provides a framework that helps banks and financial institutions navigate the complexities of international trade, reducing the ris...

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Key Terms

Documentary Credit
A financial instrument issued by a bank guaranteeing payment to a seller upon presentation of specified documents.

Example: A letter of credit issued for an international shipment.

Bill of Lading
A document issued by a carrier to acknowledge receipt of cargo for shipment.

Example: The bill of lading serves as a receipt and a contract of carriage.

Discrepancy
A difference between the documents presented and the terms of the credit.

Example: A discrepancy occurs if the invoice amount does not match the letter of credit.

Compliance
Adherence to laws, regulations, and guidelines in banking practices.

Example: Banks must ensure compliance with ISBP when examining documents.

International Trade
The exchange of goods and services between countries.

Example: International trade involves importing and exporting products.

UCP 600
A set of rules published by the International Chamber of Commerce governing documentary credits.

Example: UCP 600 outlines the responsibilities of banks in international trade.

Related Topics

Documentary Credits
Explores the types and functions of documentary credits in trade finance.
intermediate
Risk Management in Banking
Covers strategies for managing risks associated with international transactions.
advanced
International Trade Regulations
Discusses the legal frameworks governing international trade practices.
intermediate

Key Concepts

Document ExaminationUCP 600ISBP GuidelinesInternational Trade