Best Trade Solution

BANK X issued an lc available at sight requiring documents,invoice and B/L; has not mentioned anything about drafts and is available with "y" bank by payment and has requested them to confirm; bank y as part of their internal rules need drafts for sight payment. they confirmed and as part of their confirmation necessitated the requirement of drafts.Beneficiary then presented the documents along with drafts to issuing bank bypassing the confirming bank. Amount in word and figures were mismatching.


can the issuing bank raise such a discrepancy?

Issuing bank cannot raise discrepancy..as they have not mentioned the drafts in requirement.They should disregard it and honour the presentation , if therwise in order.

Hi Pal,

draft if noy requested in field 46 or listed in documents to be presented is not a "document".
So any mistake on draft is not object of discrepancy, naturally the issuing bank must ascertain the correct amount to pay.
I dontknow if in your case, by passing confirmed bank is correct, it is better to present document to confirming bank and wait for refuse, then represent them to issuing bank.
Other comments appreciated
Ciao

Hello,

Issuing bank should disregard the draft due to it's not a required document as per LC terms however it is another question on the behaviour of the beneficiary bypassing the confirming bank nevertheless present a draft.

Hi

I believe that in there is no need to present a draft if it is not required as in this case of this sight LC. However you have also stated that the confirming bank has made an amendment to the LC requiring a draft.

Can a confirming bank actually do this? If they are not comfortable handling LCs without draft they may simply choose to refuse to confirm the LC. Their role is not to change the LC itself. Please correct me if i am wrong.

Hence the presentation is deemed compliant and the draft is to be ignored

Regards
Felix

dear,

the draft is required by confirming bank as part of their confirmation agreement.

for issuing bank in your case the draft is not a document required and may simply disregard it or return back to presenter, beneficiary
.
if other documents are complied, issuing bank must reimburse beneficiary.

Regards

Draft is not required in case of sight payment, neither does the issuing bank requested for it so there is no discrepancy in this case.