The Letter of Credit (LC) process starts with the buyer and seller in a trade agreeing upon the initial contract. The buyer then request their bank to issue an LC. The buyer's bank issues the LC to the seller's bank.
Applicant: It is the buyer of the goods or services supplied by the seller. A letter of credit is opened by the issuing bank as per the applicant's request. However, the applicant does not belong to one of the parties to a letter of credit transaction.