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

The forum is dedicated to all who deals with LCs. Please share your experiences, problems and opinions with us. You are requested to be confined to LC related issues only. Let us together discover the beauty of Letter of Credit. Thank and regards – admin; besttradesolution.com
Post Reply
RAL0892
Posts: 1
Joined: Tue Oct 05, 2021 5:59 pm
First Name: Rim
Last Name: AL
Organization: TUNIS
Filter: Two Plus Two =: 4
Location: TUNISIA

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

Post by RAL0892 » Tue Oct 05, 2021 6:33 pm

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,

User avatar
picant
Posts: 2026
Joined: Wed Aug 20, 2008 1:49 pm

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

Post by picant » Mon Oct 11, 2021 10:51 am

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
Posts: 727
Joined: Sat Oct 15, 2011 12:27 pm
First Name: Dinesh Kumar
Last Name: ...
Organization: Chrome
Filter: Two Plus Two =: 4
Location: PU

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

Post by dinesh2476 » Sat Oct 16, 2021 8:41 pm

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

Post Reply