requirement of drafts in URR

[dholat]

Dear all,

thanks for your earlier support. please consider the following two quotes from URR

in case of reimbursement authorization -

e. If the reimbursing bank is requested to accept and pay a time draft, the reimbursement authorization must indicate the following, in addition to the information specified in (d) above:
i. tenor of draft to be drawn;
ii. drawer;
iii. party responsible for acceptance and discount charges, if any.

in case of reimbursement undertaking -

c. If the reimbursing bank is requested to accept and pay a time draft, the irrevocable reimbursement authorization must also indicate the following, in addition to the information contained in (b) above:
i. tenor of draft to be drawn;
ii. drawer;
iii. drawee of draft, if other than the reimbursing bank;
iv. party responsible for acceptance and discount charges, if any.

as u see in case of reimbursement undertaking, the authorization needs to show the drawee in addition. can someone help me why RA does not require it?

[jmitra]

this is because reimbursement undertaking is to a specific bank and thus one will be limiting the bank with which the credit is available. hence the no. of drawee here is quite limited. since reimbursing bank will be putting its own undertaking here, surely it would like to know that who else in the chain could be the drawee.

but a reimbursement authorization is a open think. any bank can claim if the credit is available with any bank. when a credit is available with any bank which has a reimbursement undertaking, it is most likely that the credit is available by honor. so the draft will be drawn on the nominated bank. hence there is no point on asking this.