Maturity date has lapsed - interest charged

[sean]

Good day All,

1. As issuing bank how do you manage payment under Import Letters of Credit with deferred payment terms where the applicant has accepted discrepant documents or the documents that were presented are non-discrepant (deferred payment terms). In other words do you wait for applicant to provide you with payment instructions to pay under the Import Letter of Credit or do you as the issuing bank just go ahead and debit the applicant's account.

2. Also do you recover delayed payment interest as Issuing Bank for having to follow-up on payment with the applicant?

3. If nominated bank claims interest for delayed payment do you recover THEIR interest from the applicant PLUS recover YOUR interest as Issuing Bank? In other words do you debit the applicant with nominated bank's interest AND issuing bank's interest?

Thanks in advance.

[berry]

here is my comments on your questions.

1. if the document is discrepant, we wait to provide acceptance till the waiver of the applicant. once a bill is accepted, we pay on maturity debiting the account of the applicant. if there is not sufficent fund in applicants account we pay from our own pocket

2. if we pay from our own pocket, of course we charge interest on the applicant. there is also a followup charges.

3. if nominated bank claim interest, we try to avoid it in the first place . however we pay at the end by debiting applicant account. ok, there can be only one interest; either by issuing bank or by nominated bank. becuase if the nominated bank is not paid, then the issuing bank has not been out of fund. got it?