Field 57a in a Letter of Credit (LC), specifically within an MT 700 SWIFT message, identifies the "Advise Through Bank."
Understanding Field 57a: Advise Through Bank
This field is an optional part of the MT 700 SWIFT message, a crucial document in international trade finance. It's used when the advising bank (the bank that informs the beneficiary of the LC's issuance) is different from the receiver of the MT 700 message.
Key Aspects of Field 57a:
- Purpose: To specify the bank through which the LC is to be advised to the beneficiary.
- Optional: It's not always present; it's only needed if the advising bank isn't the same as the bank receiving the MT 700 message.
- Identification: It provides details allowing the beneficiary's bank to properly receive and authenticate the letter of credit.
- Impact: It ensures the beneficiary is correctly informed about the LC terms and conditions through their own bank, facilitating a smoother transaction.
Why is it Important?
Using an Advise Through Bank can be beneficial in situations where:
- The issuing bank does not have a direct relationship with a bank in the beneficiary's country.
- The issuing bank wants to leverage a specific bank's expertise or network in the beneficiary's region.
- The beneficiary has a preferred bank for handling LC transactions.
Example:
Imagine an importer in the USA (Applicant) obtains a Letter of Credit from their bank (Issuing Bank) to pay an exporter in India (Beneficiary). The Issuing Bank sends the MT 700 message, and wants to ensure the LC is advised to the beneficiary through the beneficiary’s local bank, which is different from the bank that received the MT700 from the issuing bank. The issuing bank would specify the details of the beneficiary's local bank in Field 57a as the "Advise Through Bank".
In summary:
Field 57a "Advise Through Bank" in a Letter of Credit is an optional field in MT 700 message that specifies the bank through which the LC is to be advised/confirmed to the beneficiary, if different from the receiver bank.
