Payment term not mentioned in LC

Sazzad · Post by **Sazzad** » Fri Feb 08, 2019 1:04 pm

Dear all

In field 41D of an LC, the term is mentioned as Available with any bank by Negotiation

There is no mention in the LC whether it is sight or usance. The issuer claims that the above term indicates that this is a sight LC. Is this correct?

picant · Post by **picant** » Sun Feb 10, 2019 2:25 pm

Hi Pal,

under negotiation, the nominated bank should credit or undertakes to credit the presentation amount immediately and charge issuing bank or beneficiary for the interests, from payment date and maturity.
So it is in effect at sight. Payment will be with or without recourse, depending on the negotiating bank
booking risks on beneficiary or issuing bank.
Other comments appreciated
Ciao

Sazzad · Post by **Sazzad** » Sun Feb 10, 2019 3:27 pm

Hi Picant

Thanks for your clarification. However, can you please explain the last part where you said, "Payment will be with or without recourse, depending on the negotiating bank booking risks on beneficiary or issuing bank."

dinesh2476 · Post by **dinesh2476** » Fri Feb 15, 2019 11:14 pm

Dear Sazzad,

With recourse- In the event of default situation, you may claim it beneficiary, the remittance you made to the beneficiary earlier.

Without recourse- You have to deal with issuing bank only, you cannot claim it from the beneficiary, once the remittance is done to beneficiary that's it

Thanks &Regards
Dinesh Kumar

Sazzad · Post by **Sazzad** » Sat Feb 16, 2019 5:52 pm

Dear Dinesh

Thanks for the clarification.