1.A buyer and a seller enter into a sales contract agreeing on payment by a documentary credit
2.The buyer applies to the issuing bank to issue a documentary credit naming the seller as beneficiary and arranges for security for opening the credit
3.The issuing bank opens a documentary credit according to the instructions of the applicant
4.The issuing bank sends the credit to the advising bank named in the credit to inform the beneficiary and perhaps also to add its confirmation to the credit
5.The seller examines the documentary credit , and requires an amendment of the credit if necessary.
6.The seller ships the goods to the buyer , obtains the title documents from the shipping firm/agent and prepares other documents required in the credit , and presents all the documents as required by the credit to the nominated bank.
7.The nominated bank reviews the document package making certain the documents are in conformity with the terms and conditions of the credit and pays the seller according to the terms of the credit.8.The issuing bank sends the documents to the issuing bank by mail or by courier or other telegraphic means , claiming reimbursement as agreed between them.
9.The issuing bank examines the documents and reimburse the negotiating bank.
10.The issuing bank sends the documents to the buyer who redeems the documents and takes possession of the shipment。