Banks are the most visible financial intermediaries in the field of economy. Their importance derives from the place and role in both economic and financial systems of each national economy. In the financial sector of Serbia, banks are the most important financial institutions, accounting for about 90% of total financial sector assets. The topic of the research refers to the letter of credit as a service banking business and it is extremely current topic, scientifically and socially justified,

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... eing important for domestic and foreign trade payments. The letter of credit is a complex banking business. Its complexity is reflected, among other things, in the number and types of legal relationships formed between the participants. Having in mind all previously mentioned facts, the paper analyzes the issues of the concept and classification of banking business as well as the legal aspect and legal relations formed in the letter of credit. The research part of the paper deals with the role and importance of banks in the financial sector of Serbia.