Cancel Reimbursement Authorization For Discrepant Presentati

[shahriar]

hi,

i was going through a operation manual of a bank and found the following statement -

if a discrepant document is received, for which an RA is given, cancel the RA without delay and issue refusal advice. can a bank do that? bu canceling the RA, the issuing bank will be denying the claiming right of the beneficiary on representation. whats ur opinion

shahriar

[Md.zakir Hossen]

HOW COULD THIS IS POSSIBLE OR WHY IT IS NEEDED.
SHARIAR, I WORKED TWO BANKS AND GO THROUGH THE OPERATIONAL MANUAL.WHAT I WILL SAY.................IT IS DOUBT WHETHER THEY READ THE ICC GUIDELINES,GUIDELINES FOR FOREIGN EXCHANGE TRANSACTION.

[Md.zakir Hossen]

Dear Shariar

The RA of Issuing Bank is irrevocable and as such cannot be amended or cancelled without the agreement of the reimbursing Bank.

The reimbursing Bank that is issued its undertaking is not bound to agree to amend its undertaking when issuing bank amends the authorization;and

A reimbursement undertaking cannot be amendmend or cancelled without the agreement of the claiming Bank.

[shahriar]

dear zakir,

i think you are mixing up RA with reimbursement undertaking. an issuing bank may cancel the RA at anytime by sending a notice to that effect. however this rule doesnt support the idea of canceling RA on a discrepant presentation. if the reimbursement is subject to URR, then

URR article 8b
in case of cancellation of RA prior to the expiry of the credit, the issuing bank must provide the nominated bank or the advising bank with a new reimbursement instruction.

regds

shahriar