Can Branch Of Issuing Bank Negotiate Under Local LC?

[dholat]

dear all,

in case of domestic letter of credit, the following scenario is very common -

import department of bank A issues a LC and ask its export department to advise the same. credit is available by negotiation with any bank. now the beneficiary make a presentation to export department and ask for negotiation.

while reference has been given to department, same happens between two branches of the same bank. should the department or branch to which the presentation has been made negotiate?

Cheers!!

dholat

[cristiand969]

In view of the following articles:
1. Branches of a bank in different countries are considered to be separate banks
2.A credit must state the bank with which it is available or whether it is available with any bank. A credit available with a nominated bank is also available with the issuing bank.
and
3.Provided that the stipulated documents are presented to the nominated bank or to the issuing bank and that they constitute a complying presentation, the issuing bank must honour if the credit is available by: .... negotiation with a nominated bank and that nominated bank does not negotiate.
the implication is that beneficiary made a presentation to the issuing bank counters which on the basis of a complying presentation it will honour, never negotiate
regards
cristian

[iLC]

i agree with cristian. even if the presentation for honor is restricted to a particular branch, the issuing bank has to honor.

iLC