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dear sir,

when we transfer a letter of credit as a transferring bank, should we retain the original credit? how can we make sure that the first beneficiary is not making another drawing with any other nominated bank.

yes we are suposed to retain the original l/c.only the nominated bank can transfer a credit.first beneficiary can not making another drawing with any other nominated bank because in transeferable l/c there is only one transefering bank and that is our bank so we are sure that if any other bank receive docs from benef. firstly it is not a nominated bank and secondly it can only send docs to our bank for further cheking and negotiation.

hi,
then do we need to endorse the transfer amount at the back of the original LC?

mini_tracy wrote:hi,
then do we need to endorse the transfer amount at the back of the original LC?

what do you mean endorse here?

of course - you should retain the original L/C



Thanks & Regards,

i agree with the answers given. the original credit should be retained; specially if its a partial transfer. in fact ISP98 gives a clue to it

6.03 Conditions to transfer
An issuer of a transferable standby or a nominated person need not effect a transfer unless:
(a) it is satisfied as to the existence and authenticity of the original standby; and
(b) the beneficiary submits or fulfils:

(i) a request in a form acceptable to the issuer or nominated person including the effective date of the transfer and the name and address of the transferee;
(ii) the original standby;

with this i would like to add that i have seen practices where the original LC is in fact transferred physically to the second beneficiary where there is a 100% transfer and the credit is not confirmed by the transferring bank.