transfer of credit and original

jim · Post by **jim** » Fri Apr 03, 2009 10:40 pm

dear sir,

when we transfer a letter of credit as a transferring bank, should we retain the original credit? how can we make sure that the first beneficiary is not making another drawing with any other nominated bank.

hassan · Post by **hassan** » Sat Apr 04, 2009 10:29 pm

yes we are suposed to retain the original l/c.only the nominated bank can transfer a credit.first beneficiary can not making another drawing with any other nominated bank because in transeferable l/c there is only one transefering bank and that is our bank so we are sure that if any other bank receive docs from benef. firstly it is not a nominated bank and secondly it can only send docs to our bank for further cheking and negotiation.

mini_tracy · Post by **mini_tracy** » Sat Apr 04, 2009 10:43 pm

hi,
then do we need to endorse the transfer amount at the back of the original LC?

fionawang · Post by **fionawang** » Sun Apr 05, 2009 3:01 am

mini_tracy wrote:hi,
then do we need to endorse the transfer amount at the back of the original LC?

what do you mean endorse here?

SHAMEER · Post by **SHAMEER** » Mon Apr 06, 2009 3:24 pm

of course - you should retain the original L/C

Thanks & Regards,

shahriar · Post by **shahriar** » Mon Apr 06, 2009 6:38 pm

i agree with the answers given. the original credit should be retained; specially if its a partial transfer. in fact ISP98 gives a clue to it

6.03 Conditions to transfer
An issuer of a transferable standby or a nominated person need not effect a transfer unless:
(a) it is satisfied as to the existence and authenticity of the original standby; and
(b) the beneficiary submits or fulfils:

(i) a request in a form acceptable to the issuer or nominated person including the effective date of the transfer and the name and address of the transferee;
(ii) the original standby;

with this i would like to add that i have seen practices where the original LC is in fact transferred physically to the second beneficiary where there is a 100% transfer and the credit is not confirmed by the transferring bank.