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Guys Need you acceptance regarding one case.

Received an LC draft and it shows:

Available with any bank by acceptance.

at the same time LC shows that draft to be drawn on issuing Bank ABC.

My opinion is that it is not correct formulation as Lc available with Bank B by acceptance draft should be drawn on bank B and not Bank ABC.

What do you suggest? and what is correct formulation when LC is available by acceptance with any bank? Should Lc show that draft to be drawn on any bank except issuing bank?

Hi Pal,

in effect UCP 600 do not prohibit a nominated bank to accept a draft in a l/c. Art 12 b and the issuing bank's undertaking to
honor such draft, if not paid at maturity is regulated by art 7 a iv.
Problems arise when nominated bank, acting on its nomination, accept this draft, being its own undertaking it must book the risk, IMHO, a sort of post-confirmation.
Naturally, this scenario will be regulated by local laws.
UCP 600 give banks opportunity to intervene widely then before.
Other comments appreciated
Ciao

dear,

the credit has been issued incorrectly. as the draft is to be drawn on the issuing bank then only the issuing bank may accept the draft. where the credit stated to be available with any bank by acceptance, filed 42d should state ''nominated bank'' rather than a named bank or 'issuing bank'. in this way, the bank that elects to accept the draft (nominated bank) will be the one on whom the draft is to be drawn.
i refer to new isbp B11 and b12 a ii
the credit is needed to be modified to allow any nominated bank to act and accept the draft if any
.
nevertheless, the beneficiary has the right to draw on the issuing bank even the issuing bank is not the drawee, if so the beneficiary is waiving their right to have an acceptance by a local bank and therefore are willing to have the acceptance and settlement of the issuing bank.in this event , a draft should only be drawn on the issuing bank if no bank is willing to accept the draft or the beneficiary is intending to present the documents directly to the issuing bank.
i refer to new isbp b12 a iii
.
i hope this will help

Regards