/// This is kind of urgent. ///
Hi, All.
I seek your advice on this.
Issuing bank ('i/b' = reimbursement bank) opened Sight LC to advising bank ('a/b') and amended confirmation status to 'MAY ADD' and payment instruction as 'UPON RECEIPT OF DOCUMENTS IN COMPLIANCE WITH L/C TERMS, I/B AUTHORIZE REIMB BANK TO CLAIM AT SIGHT'. and available with Bank XXX by negotiation.
and then, next day 'a/b' requested another amendment as this:-
- Confirmation status: Confirm/May add
- Payment instruction: Upon receipt of documents in order at confirming bank's counter, we authorize you to claim reimbursement from reimbursing bank at sight.
In this case, how can the importer collect the document and arrange the payment setting?
Does this mean that confirming bank pay to nego bank first and on the same day, they claim by MT742 to i/b at sight basis? once payment is done, will confirming bank deliver the documents to i/b? What charges will be incurred in this payment structure? I find this is totally unnecessary procedures involved.
Thank you very much for your advice in advance.
Will Confirming Bank Send The Negotiating Docs To Issuing Bank?
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ursoul486
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Anurag
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Re: Will confirming bank send the nego docs to issuing bank?
Dear Friend
1. As per my understanding if negotiating bank is different from the confirming bank whether or not negotiating bank paid or not confirming bank must effect the payment to the negotiating bank. Provided the documents are fully comply as per terms and condition of the credit. refer to UCP article 8a and article 8c.
2. Once the confirming bank determine the documents are comply it must effect the payment to negotiating bank or direct beneficiary in case if advising bank is confirming bank. Whatever maximum period is allowed 5 banking day following the date of received refer to article 14(b). Once the documents are forwarded by the confirming bank upon completion of checking and does not send the notice of refusal as per article 16c (i-iii). Confirming bank must effect the payment on the same day. If confirming bank effect the payment to the beneficiary on the same day upon completion of checking. Confirming bank is entitled to charge interest for the maximum period of 3 banking day following the date of reimbursement claim.
3. Confirming bank will send the documents to issuing bank without payment received by the issuing bank refer to article 15(b).
4. i/b = reimbursing bank and then i/b authorize reimbursing bank to claim at sight. This query is not clear.
5. charges as per lc terms and condition will apply.
6. Importer will collect the documents upon payment to issuing bank or whatever arrangement they have with issuing. bank
Best Regards
Ashish Sethiya
1. As per my understanding if negotiating bank is different from the confirming bank whether or not negotiating bank paid or not confirming bank must effect the payment to the negotiating bank. Provided the documents are fully comply as per terms and condition of the credit. refer to UCP article 8a and article 8c.
2. Once the confirming bank determine the documents are comply it must effect the payment to negotiating bank or direct beneficiary in case if advising bank is confirming bank. Whatever maximum period is allowed 5 banking day following the date of received refer to article 14(b). Once the documents are forwarded by the confirming bank upon completion of checking and does not send the notice of refusal as per article 16c (i-iii). Confirming bank must effect the payment on the same day. If confirming bank effect the payment to the beneficiary on the same day upon completion of checking. Confirming bank is entitled to charge interest for the maximum period of 3 banking day following the date of reimbursement claim.
3. Confirming bank will send the documents to issuing bank without payment received by the issuing bank refer to article 15(b).
4. i/b = reimbursing bank and then i/b authorize reimbursing bank to claim at sight. This query is not clear.
5. charges as per lc terms and condition will apply.
6. Importer will collect the documents upon payment to issuing bank or whatever arrangement they have with issuing. bank
Best Regards
Ashish Sethiya