What is role of negotiating bank in letter of credit?

The negotiation bank is the bank appointed by advising bank to determine all the provided documents such as bill of lading, commercial invoice, origin certificate, manufacturing certificate, and more documents are as per the ucp600 terms and conditions. If any descripencies in the document, it will send back to the advising bank for correction.

Negotiating bank and advising bank may be samilar . Negotiating bank negotiate(Foreign documentary bill purchased) the documents if documents meet the LC terms and conditions, If negotiating bank finds any discrepancy in documents they sent the documents to issuing bank in collection. And receive the payment from reimbursing bank for exporter.

The Negotiating Bank reviews the documents requested by in the letterof credit and checks for compliance with the terms of the LC.
It then remits payment to the beneficiary.
The negotiating bank is usually stipulated by the seller.

There are many things,negotiating bank negoctiate the LC terms,payement terms,arrangements with other banks,incase of failure in payment from the applicant;the negotiating bank is liable to pay the beneficiary bank.But remember one thing credit worthiness report is very important of beneficiary so always get the credit report in first transaction.