correspondent bank - failure to nominate

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kartone
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Joined: Tue Jul 27, 2021 12:12 pm
First Name: lawrence
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correspondent bank - failure to nominate

Post by kartone »

If the beneficiary after 4 months from signing the supply contract has yet to nominate the correspondent bank in a list of banks provided by the LC issuing bank, is the beneficiary in breach of the contract?
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picant
Posts: 1963
Joined: Wed Aug 20, 2008 1:49 pm

Re: correspondent bank - failure to nominate

Post by picant »

Hi Pal,

probably it will depend on the contract terms.
I think that beneficiary of l/c tries to obtain funds from a bank that has direct relationship
with issuing bank. In any case issuing bank could issue a l7c valid for negotiation with any bank
in beneficiary's country, the advising bank will contact the beneficiary and utilize a second advising bank,
the latter indicated by the beneficiry afterwards.
The issuing bank quoted its own correspondents but none has a relationship with beneficiary.
other comments appreciated
ciao
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