Amendment-Beneficiary name

With the introduction of Uniform Rules for Documentary Guarantee or URDG 758, the rules for Documentary Guarantee seem to be popular again. It can be imagined from the increasing number of questions that have popped up in recent days. Documentary Guarantee Forum is an effort to develop a platform to discuss these questions.
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Sabrina
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Amendment-Beneficiary name

Post by Sabrina »

Dear Experts,

Can the name of beneficiary be changed under guarantee?

In my view beneficiary name cannot be changed completely. If the applicant want to change the beneficiary name completely it should cancel the guarantee and issue new one. Guarantee is an undertaking of the bank to pay if the applicant default. Now when the undertaking given to the said beneficiary is to be changed, the bank should obtain the original copy of the guarantee. Some may argue that the bank after retention of original guarantee can issue another guarantee replacing the beneficiary name. But the guarantee is issued by the bank based on the underlying relationship. Now when it is to be issued in favour of new beneficiary, new contract is required. Similarly the bank may also have recorded the detail of first beneficiary in system. Hence in case of system audit, system should exhibit same details as in record file under same guarantee reference number.

I am not sure if my understanding is correct. Seek experts opinion.


Regards,
Nitin
Sabrina
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Amendment-Beneficiary name

Post by Sabrina »

Comments appreciated !!
RAJNAGRE
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Beneficairy Name

Post by RAJNAGRE »

As per Banking rules there is no amendment possible in Bank Guarantee accept extension of time period.Raj Nagre :)
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picant
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Depending on the rules...

Post by picant »

Hi Pals,

URDG 758 admit amendment and transferability, so I dont see hamper to modify beneficiary's name.
Other Rules or local laws may prohibit it.
Other comments appreciated
Ciao
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