Nominated bank and Issuing bank

The forum is dedicated to all who deals with LCs. Please share your experiences, problems and opinions with us. You are requested to be confined to LC related issues only. Let us together discover the beauty of Letter of Credit. Thank and regards – admin; besttradesolution.com
Post Reply
rezwan
Posts: 2
Joined: Sat Jan 20, 2018 12:55 pm
First Name: Rezwanul
Last Name: Kabir
Organization: Dhaka Bank Limited
Filter: Two Plus Two =: 4
Location: Dhaka,Bangladesh

Nominated bank and Issuing bank

Post by rezwan » Sat Jan 20, 2018 1:05 pm

I have three questions.Please explain these briefly:

01. When does a nominated bank can honor?
02. Why nominated Bank is the agent of issuing bank?
03. "Issuing bank cannot play the role of nominated bank.Except article:38" why??

cristiand969
Posts: 754
Joined: Tue Aug 05, 2008 1:52 pm
First Name: Cristian
Last Name: D.
Organization: Bank
Filter: Two Plus Two =: 4
Location: RO

Re: Nominated bank and Issuing bank

Post by cristiand969 » Mon Jan 22, 2018 12:52 pm

Briefly
01. because it purchases docs not honors
02. because it has been so authorized by issuing bank to pay/honour
03. if issuing bank plays the role of the nominated bank, then who "nominated" it ?

LinhPham
Posts: 2
Joined: Mon Oct 02, 2017 9:12 pm
First Name: Linh
Last Name: Pham
Organization: Foreign Trade Univer
Filter: Two Plus Two =: 4
Location: Vietnam

Re: Nominated bank and Issuing bank

Post by LinhPham » Mon Jan 22, 2018 9:31 pm

In my opinion,

01. A nominated bank can honor when the credit is available with it, which is indicated in field 41A of L/C (MT 700 LC format). For example, 41A: Available with any bank by payment. In that case, any bank can honor this LC.

02. When the nominated bank has honored a complying presentation, the issuing bank will have to reimburse that bank, so the issuing bank tends to choose its agent as the nominated bank.

03. The issuing bank is the last resort where the nominated bank failed to perform either reluctant to perform on issuing bank’s instruction or agreeing to perform but later decline. It actually has more responsibility than the nominated bank.

LinhPham
Posts: 2
Joined: Mon Oct 02, 2017 9:12 pm
First Name: Linh
Last Name: Pham
Organization: Foreign Trade Univer
Filter: Two Plus Two =: 4
Location: Vietnam

Re: Nominated bank and Issuing bank

Post by LinhPham » Tue Jan 23, 2018 6:08 pm

In my opinion,
01. A bank can honor when the credit is available with it, which is indicated in 41A field in L/C

Post Reply