In international commercial law, a documentary credit is not merely a method of payment; rather, it constitutes a banking contract under which the issuing bank undertakes a payment obligation within the terms and conditions of the credit. This undertaking, alongside the contractual relationship between the bank and the applicant, also creates a contractual right for the beneficiary. Accordingly, the issuing bank stands at the center of a network of contractual relationships: on the one hand, the credit‑opening agreement with the applicant, and on the other hand, the credit contract with the beneficiary, which becomes enforceable upon presentation of the stipulated documents and within the limits of the credit. The main issue addressed in this research is to clarify the basis of the issuing bank’s liability and to determine its scope in performing contractual obligations arising from the credit, particularly with respect to document examination, notification of discrepancies, observance of time limits, and compliance with instructions. Using a descriptive–analytical method, this study, while emphasizing the independence of the credit from the underlying contract, examines different approaches to the basis of bank liability, including risk‑based liability and liability based on professional fault, and seeks to identify a practical criterion for establishing such liability. The findings indicate that although documentary credit operations inherently involve risk, the assessment of the bank’s liability should be based on evaluating the bank’s conduct against the standard of reasonable care and diligence expected of a prudent banker, within the framework of the credit terms and the rules governing banking operations. Accordingly, where fault (in the form of a breach of contractual duties or banking custom), damage, and a causal link are established, the liability of the issuing bank may be invoked.