Issuing Bank Finds Discrepancy In Documents

[pj4u44]

Suppose lc is available with A bank.document presented to A bank who forwarded the document to issuing bank saying document is complied with lc but if issuing bank finds any discrepancy whether it is acceptable?

[dinesh2476]

Dear pj4u44,

a. A nominated bank acting on its nomination, a confirming bank, if any, and the issuing bank must examine a presentation to determine, on the basis of the documents alone, whether or not the documents appear on their face to constitute a complying presentation.

Thanks & Regards
Dinesh Kumar

[durgesh576]

Dear pj4u44,

I am sorry for the delayed reply.

But to actually answer the question "NO the documents are not acceptable".

Explanation is long im sorry:

A bank has thought the documents are complaint and sent to Issuing bank but issuing bank found the documents are discrepany. Hence the documents are not acceptable because they are not complaint or discrepant.

No matter who has found the discrepancy whether it is negotiating bank,confirming bank or issuing bank the documents will remain non complaint and thus not acceptable.

But the actual question here would be what are the consequences ?

To answer this question we need to know the role of A bank whether it is a nominated bank or a confirming bank.

If it is nominated bank then it can easily go back to the beneficiary and get back the funds.

If it is a Confirming bank then it cannot recover the funds because confirmation is always without recourse.

[picant]

Hi Pals,

what kind of discrepancy, is it true or not?
I think that is difficult that a nominated bank conscious sent documents to issuing bank with discrepancies.
Naturally it is possible to make a mistake, but normally two bank clerks controll documents when the bank is
required to act on its nomination.
So if it is a clerical mistake, the bank must re-think to its organization, if kn ows that documents are not correct had informed the presenter, if the issuing bank plays dirty will argue with the latter.
Other comments appreciated
Ciao

[SHossain]

Issuing bank always scrutinize the docs within 5 banking days and if they find discrepancies, they give information by a single to the presenter to hold or dishonor the same. If they will not get satisfactory answer from the presenter issuing bank dishonor the same and it will be entitled to claim a refund with interest, of any reimbursement made according to the Article 16, UCP 600

Shahadath