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Hi! I am having business with one Japanese company from whom I am importing material. They do not offer LC 90 days credit for the business. But after lot of follow up they offered me LC 90 days with usance interest to my account.
they sent me PI based on the LC 90 days & the price doesn't include the interest amount as they do not know the exact amount.
They said for this transaction they need payment at Sight basis even though the terms are LC 90 days. (As in u/stand they need to discount the LC)
After I sent the LC draft to them based on the PI received & the Clause No. 78 mentioned as below :

:78: INSTRUCTIONS TO THE NEGOTIATING BANK
DOCUMENTS TO BE DISPATCHED TO XXXXXXXX BANK TRADE
SERVICES, INDIA DOCUMENTS TO BE DISPATCHED BY COURIER IN ONE
ON RECEIPT OF DOCUMENTS CONFORMING TO THE TERMS OF THIS
DOCUMENTARY CREDIT, WE UNDERTAKE TO REIMBURSE YOU AT MATURITY IN
THE CURRENCY OF THIS DOCUMENTARY CREDIT IN ACCORDANCE WITH YOUR
INSTRUCTIONS, WHICH SHOULD INCLUDE YOUR U.I.D. NUMBER AND THE
A.B.A. CODE OF THE RECEIVING BANK IF THE CREDIT IS EXPRESSED IN
U.S. DOLLAR.
EXCEPT AS OTHERWISE STATED, THIS CREDIT IS SUBJECT TO THE
APPLICABLE RULES SPECIFIED IN FIELD 40E OF THIS MESSAGE.

But my supplier asked me to change the same as below :

REIMBURSE YOURSELF ON THE REIMBURSING BANK AT SIGHT BASIS REGARDLESS OF THE DRAFTS TENOR. ACCEPTANCE COMM AND DISCOUNT CHARGES ARE TO THE ACCOUNT OF APPLICANT.

My bank told me that Clause No 78 can't be changed but in order to give immediate payment to m principle they mentioned additional conditions in clause No. 41-D) under the heading payment terms which states that nego bank may pay to beneficiary at sight basis if required & 90 days usance interest will be borne by applicant with Libor ++ charges.

But my supplier is pushing me to change the Clause No. 78 as above. Kindly guide me what can be done now? else i'll have to look for another supplier.

Yogen

Without looking at the entire lc, it is difficult to say whats causing beneficiary's confusion. However, as the name implies, Field 78 is meant for the negotiating bank and not for the beneficiary.
The form of LC you are referring is popularly called UPAS. I have seen widespread confusion about this LC. In any case it works on the basis understanding between the issuing bank and negotiating bank. When that understanding is present, problems like the above one are easily addressed.