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Dear Colleagues
.
Would appreciate if I could have your expert advice on
.
1.When and actually why does a LC Issuing bank issue a LC as available with itself? Benefits/Disadvantages to any party ?

2.In cases where an LC is available with bank A and the Issuiing bank were to receive
Docs from Bank B (the beneficiary’s bank forwarding the doc directly to the issuing bank)
Either as negotiated or as docs treated on approval basis , Is the Issuing bank right in
pointing out the discrepancy – docs received not from the available with bank ?
.
Thanks and Regards
Rajesh

Some advantages for issuing bank/ disadvantages for beneficiary:
1. Issuing bank afforded extra time before disbursement
2. Issuing bank not liable for documents lost in transit (Art. 35)
3. Issuing bank has limited liability under Art. 35 & 37
4. Issuing bank retains control over the document examination process, and ensures beneficiary does not obtain funds under a presentation which is found to discrepant by the issuing bank.

The action of the issuing bank receiving the documents through a third party bank does not by itself, result in a discrepancy. Since the documents are payable at the issuing bank's counters, it is by examination of the documents once they reach the issuing bank which would determine the discrepancies.

Dear Abrar,

Please acknowledge the below

''Issuing bank afforded extra time before disbursement''

For confirm case issuing bank has to give debit authority or reimbursement authority where the payent would be debited from issuing bank account before document received from them. If having lc available with issuing bank,bank will pay after docs found compliant at the issuing bank counter.

Regards
Dinesh

dinesh2476 wrote:Dear Abrar,

Please acknowledge the below

''Issuing bank afforded extra time before disbursement''

For confirm case issuing bank has to give debit authority or reimbursement authority where the payent would be debited from issuing bank account before document received from them. If having lc available with issuing bank,bank will pay after docs found compliant at the issuing bank counter.

Regards
Dinesh

But, I am assuming that since the LC is available with the issuing bank, the LC is not confirmed, and that the issuing bank has not provided TT reimbursement

Dear Abrar,

Thanks.

dinesh

Hi Abrar,

would you please elaborate how issuing bank has limited liability in article 37 if l/c available with issuing bank.

Thanks.

I think l/c available with issuing bank can be seen in case that both applicant and beneficiary are customer of issuing bank (domestic l/c)

From my observation regarding the case, the following two points has a wide implication:
01. ''Issuing bank afforded extra time before disbursement''
02. issuing bank retains control over the document examination process, and ensures beneficiary does not obtain funds under a presentation which is found to discrepant by the issuing bank.

It depends on the demand of the applicant. Also, The less intermediary, the less cost.