From L/C AT SIGHT to Def Payment (and vise versa)

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RAL0892
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From L/C AT SIGHT to Def Payment (and vise versa)

Post by RAL0892 »

Hi Everyone,

I hope you are all having a good day =))

I don't know if this issue has been addressed yet (if so, I would be grateful if you could link in the topic). Otherwise, here is my question:

*In which cases is it possible to amend a Letter of credit issued to be paid at sight TO a Letter of credit by Deferred payment ?
(*What are the risks? *Which departments should be involved? *is it easier than amending a DEF PAYMENT L/C to an At sight payment?)

Any readings regarding this matter would be helpful

Thank you very much for your assistance,
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picant
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Re: From L/C AT SIGHT to Def Payment (and vise versa)

Post by picant »

Hi Pal,

IMHO, it is possible under agreement of the involved parties.
In case of payment at sight amended to def payment, the risk for the bank is greater as it is losing the guarantee of
the goods represented by a bill of lading(or AWB or Truck Waybill). It depends on the credit facility granted to the applicant.
Other comments appreciated.
Ciao
dinesh2476
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From L/C AT SIGHT to Def Payment (and vise versa)

Post by dinesh2476 »

Hi

As picant rightly ponted out it is possible if both parties agreed to do so.

From the bank's perspective - in Sight payment cases, they debit the client's account and make payment.

For the usance cases, the bank books the transaction for the maturity date to effect payment.

In both cases, banks check the credit facility of the applicant with the bank and act accordingly.

So it is between the applicant, beneficiary(agreeing for payment at future contrary to the originally agreed term SIGHT) and the issuing bank and the credit facility of the applicant with the issuing bank.

Thanks & Regards
Dinesh Kumar
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