Best Trade Solution

could anyone explain the exact meaning of below mentioned urr725 art.11 iii
it says
the reimbursing bank has no obligation to provide notice of non-reimbursement until such predetermined date
what does it means
does it mean until predetermined date (maturity date)
is it too late?


iii. If the predetermined reimbursement date is more than three banking days following the day of receipt of the reimbursement claim, the reimbursing bank has no obligation to provide notice of non-reimbursement until such predetermined date, or no later than the close of the third banking day following the receipt of the reimbursement claim plus any additional period mentioned in (a) (i) above, whichever is later.

The predetermine date is provided by the claiming bank and there may be an agreement with the issuing bank on the date of payment and issuing bank may require sometime to fund their account, i.e. on or before the predetermine date with the reimbursing bank. The role of the reimbursing bank is to make payment with the condition that RA is valid and there is sufficient fund for such payment, until such predetermine date, the reimbursing bank may hold the payment without any obligation.

URR 725 article 11 (c) iii further provide that such predetermine date will not affect the reimbursement right under article 11 (a) on the 3 banking day plus the pre-debit notification (if any). between the predetermine date and the processing date allow under 11(a), the reimbursing bank has until the latest between these 2 days to either effect payment or serve non reimbursement notice.

thank you danohng
I understant that
if pre-determined payment date 15.04.2010 and claiming bank sends the 740 message on the same day (i.e 15.04.2010)
payment can be effected three business days later the pradatermined date
moreover suppose if there is a pre notification period such as 2 days may be 5 business days later
is it correct

in addition that in art 6 says
i. pre-notification of a reimbursement claim to the issuing bank must be included in the credit and not in the reimbursement authorization;
my question
how can an issuing bank communicates with reimbursing bank for this pre-notification time

the commentary on URR says on article 11 c

"if the predetermined date is more than three banking days after receipt of the claim, the reimbursing bank shall have no obligation to provide any notice of non reimbursement until the close of third banking day after the receipt of the claim, plus any additional time provided in sub-article (a)......"

URR 725 article 6 (f)
pre-notification is the notification from the claiming bank to the issuing bank, a requirement of such notification must be included in the credit.
pre debit notification is the notification from the reimbursing bank to the issuing bank upon received of reimbursement claim from the claiming bank and such requirement must be included in the credit.

note that both notification should not include in the RA because :
- pre notification is between the issuing bank and the claiming bank, the reimbursing bank do not need to involve in the agreement between these 2 banks.
- pre debit notification - as per standard banking practice, the master agreement between the issuing bank and the reimbursing bank already address this pre debit notification requirement upfront. If such pre debit notification is require for a particular issuing bank, all their reimbursement claim will have a pre debit notification period agreed as per the master agreement.

You understanding of the 1st part is correct and hope the above explanation make sense.

thank you very much again ı understand as much as you write it is very helpful
everything okey until to three banking days but ı did not understand well how the reimbursing bank know the additional period.
suppose I am reimbursing bank and I received a claim today (suppose monday) ı will conclude latest on thursday (in 3 banking days). where and how can ı add any additional time to this three banking day (suppose thursday ) as a reimbursing bank

The reimbursing bank will know when to send the pre debit notification (which will add on the processing date) follow the MASTER AGREEMENT between the reimbursing bank and the issuing bank. This MASTER AGREEMENT will have the details whether pre debit notification is require and how many days is require for the reimbursement agreement.