Whether Its Necessary To Add Confirmation Before Negotiating

abhishek7438 · Post by **abhishek7438** » Sat Sep 13, 2014 12:15 pm

Whether its necessary to add confirmation before negotiating and discounting the documents

ritikaagg · Post by **ritikaagg** » Tue Sep 16, 2014 9:27 am

no its not necessary to add confirmation to the bill before negotiation

dinesh2476 · Post by **dinesh2476** » Thu Sep 18, 2014 3:15 pm

Dear All,

I heard about pre confirmation and post confirmation(after presentation of credit comply documents) at negotiation bank/confirming bank counters.

It is additional undertaking/commitment of the confirming bank on behalf of the the issuing bank to the presenter. Having said that, Believe no such commitment required to the presenter after negotiating/discounting the documents(means no value after the presenter received proceeds)

Please correct me if am wrong. Hope i am missing something.

Thanks &regards
Dinesh Kumar

KRISH · Post by **KRISH** » Mon Sep 22, 2014 7:24 pm

Hello Abhishek,

As Dinesh rightly said Confirmation is an additional undertaking if Credit compliant docs are presented under a confirmed LC, the confirming bank will have to honor the presentation and pay the beneficiary.

Negotiation means means the purchase by the nominated bank of drafts (drawn on a bank other than the
nominated bank) and/or documents under a complying presentation, by advancing or agreeing to advance
funds to the beneficiary on or before the banking day on which reimbursement is due to the nominated
bank. Also i see that you are acting as a Nego bank and credit available at your counters.

I feel confirmation is not required before negotiating.

Please correct me if wrong.

Many thanks,
Krish

mskhan42 · Post by **mskhan42** » Wed Sep 24, 2014 6:27 pm

no its not necessary.

IJTUDU · Post by **IJTUDU** » Wed Oct 01, 2014 4:42 pm

Not necessary to add confirmation before negotiation. However, in case of a confirmed LC, the confirming bank undertakes negotiation on a "without recourse" basis, whereas in case of an unconfirmed LC, the nominated bank will invariably negotiate on a "with recourse" basis.

Regards,

Isaac

M.A.Chowdhury · Post by **M.A.Chowdhury** » Wed Oct 15, 2014 1:37 am

Yes, the main issue is "recourse". If the bank negotiate "Without Recourse", confirmation may not be a issue for beneficiary. But, in practice, negotiation by nominated bank is with recourse to beneficiary.