Transfer LC- Honour/Negotiate

dinesh2476 · Post by **dinesh2476** » Tue Apr 18, 2017 8:04 pm

Dear Experts,

please advise the reason for having article Transferable credit 38(J) when there is no obligation for the nominated bank to honour or negotiate unless there are the confirming bank.

Though the confirmation instruction in the transferred credit is as the same strengh as original credit, these confirmation instructions are mean to second beneficiary only. can the nominated bank by transferring take advantage of such confirmation instructions by the transferring bank and honour the payment before receipt of payment from them.

can a nominated bank by the transferring bank confirms the credit basis the instructions in the transferred credit?

Regards
Dinesh Kumar

dinesh2476 · Post by **dinesh2476** » Thu Apr 20, 2017 4:58 pm

Dear Experts,

Any opinion welcome.

Thanks.

Regards
Dinesh Kumar

picant · Post by **picant** » Fri Apr 21, 2017 12:51 am

Hi Pal,

If the original credit, transferable, contains the word CONFIRM or MAY ADD, the receiving bank will transfer the l/c to second beneficiary ADDING ITS CONFIRMATION but, if not specifically authorized in the l/c, without indicating to the bank's of second beneficiary to CONFIRM.
So the bank's of second beneficiary , evennominated, has no obligation to honor.
Other comments appreciated
Ciao