Local LC & Branches Of Bank Within Same Country R Same Bank

[shahriar]

dear friends

ICC opinion R387 says that branches of a bank within the country are the same bank.

now for local LCs, its not uncommon to have branches of a bank as the issuing, advising and nominated bank.

though UCP havent spoke off directly that issuing bank and nominated bank needs to be different, if we analyze the wording used, we may interpret UCP asking for it.

back to my local letter of credit question, how would u interpret it UCP 600 framework?

regd

shahriar

[Md.zakir Hossen]

Dear Shariar,
This is the topic which I also think for many days.
Specially in advising Credit.I think branches of a bank within the country that advise the credit does not prohibit the function of Advising Credit.
So...........it may also may be an international Standard Banking Practice.

I may be wrong.

[Mehdi]

Completely in agreement with "So...........it may also may be an international Standard Banking Practice". However, I am substantiating by adding that local LC in FC can only be issued if it is supported by export LC issued by foreign buyers. This is to note that a resident cannot create liabilities in FC in favor of a resident as per existing regulations. Hence, UCP framework is applicable for local LC in FC only when it is backed by export LC.

Regards.........Mehdi

[shahriar]

thanks dear mehdi and zakir,

i also searched on the topic and found almost similar answer.

regd

shahriar