Pre-debit Notification

omar · Post by **omar** » Wed Mar 07, 2012 4:12 pm

Does any one understand the pre-debit notification which is mentioned under article 6 of URR 725???

Appreciate your help and support
regards

senioreta · Post by **senioreta** » Sun Mar 11, 2012 11:37 pm

pre debit notification is noted by the issuing bank to the reimbursing bank and be mentioned in 740 and in 700 (in order to notify the issuing bank for debiting their a\c )
.
if pre-debit notification is 3 days and claim made from the claiming bank value 03\03\2012 reimbursing bank can pay till 06\03\2012 (being extra 3 days added to the time permitted to the reimbursing bank to informing the issuing bank) and the claiming bank has no right to claim delayed payment
.

omar · Post by **omar** » Mon Mar 12, 2012 12:07 pm

I think pre-debit period will be added over the 3 days (which is the minimum period to honor claim from the reimb bank) . i.e, the total period will be 6 working days.

thnx

senioreta · Post by **senioreta** » Mon Mar 12, 2012 3:24 pm

yes it will be added to the 3 days permitted by rules to the reimbursing bk to honour the claim

dinesh2476 · Post by **dinesh2476** » Sun Dec 25, 2022 3:02 pm

Hi Expert

Good day

We request your support.

This is regarding pre-notification and pre-debit notification.

I have seen the pre-notification in the LC that - 3 days notification before the claim.
So the nominated bank does inform the issuing three days in advance before claiming to the reimbursing bank.

However, Kindly help me share the LC condition to be used for pre-debit notification. I have seen separate undertakings between issuing banks and reimbursing banks that for any claim for that matter, the reimbursing bank would update issuing bank on the pre-agreed debit notification and post debit only on the so on so date.

But how does the requirement of pre-debit notification help when such communication is being passed between issuing bank and the nominated bank in MT700?

Even though LC states 3 days PDA, How does it affect the reimbursement under where the nominated bank has no authority to debit the IB account and only reimbursing bank has authority and control.

comprehensive answers with samples would help understand this better as it seems people are already part of this forum trying their best to get answers but vain.

Thanks & Regards
Dinesh Kumar

picant · Post by **picant** » Mon Dec 26, 2022 1:13 am

Hi All and Happy Christmas or seasons greetings,

When a dumentary credit, sent by MT700 and specially if confirmed by the receiving bank, available at sight, but alfo by def payment, indicaes that, field 78 Against complying documents you are authorized to claim reimbursement from the bank indicated in field 53A, value three banking days after your Swift msg to ourselves quoting the disboursed amount............, the issuing bank should sent a MT740 to the bank in field 53A authorizing to accept claims.

On availment the Confirming/nominated babk will send its MT742 to reimbursing bank in order to authorize the latter to honor reimbursement claims as per documentaruìy credit.

The issuing bank could clause its MT 740 in field 72 about a pre-debit notification, but the issuing bank has already be informed by the confirming/nominated bank about the debit entry, in time to provide cover or otherwise.

The issuing bank, in any case, will receive in 24 hours a MT 900 concerning this debit entry.

So, if I heve well understood notice to issuing bank and claim to reimbursing bank will be made the same day stating a further value date, that must be as per URR 725, or as per art 13 UCP 600, if URR are not applicable.
Other comments appreciated-Ciao

dinesh2476 · Post by **dinesh2476** » Wed Dec 28, 2022 6:50 pm

Hi Picant

Thanks for your valuable time. Thanks for always ensuring that queries of the member of this forum addressed effectively.

However, to better understand this, we request your support.

- What would be the statement that assumes responsibility that pre-debit notification has been communicated in the LC
2. Why pre debit notification is necessary in MT700. What is the advantage to both issuing bank and claim bank by underlining such conditions in the LC.
3. What is the difference between pre-notification and pre-debit notification. In your example- pls clarify the below statement bit more. pls

but the issuing bank has already be informed by the confirming/nominated bank about the debit entry, in time to provide cover or otherwise

. Any requirement for:
i. pre-notification of a reimbursement claim to the issuing bank must
be included in the credit and not in the reimbursement authorization.

ii. pre-debit notification to the issuing bank must be indicated in the
credit

picant · Post by **picant** » Wed Dec 28, 2022 11:46 pm

Hi Pal,

in a DC under UCPURR, in field 78 is written:
We authorize you to reimburse yourselves for all payment effected under this credit on our ..... H.O. a/c held with
bank indicated in field 53A value 5 banking days after receipt of your Swift to us and to the reimbursing bank confirming that the presentation is fully complying"

So I will wait for a credit entry with that value date, even if Art 11 of URR 725 states that 3 days time to Reimbursing bank is allowed. Probably if the value date will be later I will clain interests .

In the past, specially in USA, it was common to mantain a big balance on USD Account, but due to the fees and costs now applicated ,funds are paid in only when necessary. In this case 5 banking days are enough to provide a cover to the amount disbursed.
Naturally is only an example!

Comments appreciated
Ciao

dinesh2476 · Post by **dinesh2476** » Thu Jan 12, 2023 11:33 pm

Hi Picant,

Good day

Sorry for the trouble.

Pls correct me if i am wrong.

What i have understood from the earlier thread is that

Pre-notification - of reimbursement claim is that if there is a notification required for 3 days then
claiming bank has to wait for 3 days though presentation complying and claim can be sent after 3 days

CLAIM ON HOLD - Between claiming bank and issuing bank.

Pre-debit notification- 3 days- claiming bank has to understand that despite their value date
reimbursing bank has 3 days( as per URR) and additional 3 days as per LC conditions(pre debit)

claiming bank cannot claim delay after 3 days.

PAYMENT ON HOLD- between reimbursing bank and issuing bank. But claiming bank should understand the expected time of payment basis the LC PDA condition.

Thanks & Regards
Dinesh Kumar

dinesh2476 · Post by **dinesh2476** » Thu Jan 19, 2023 2:19 pm

Hi Experts

any comments would help.

Thanks & Regards
Dinesh Kumar