By negotiation, draft drawn on negotiation bank

[dinesh2476]

Experts,

Are there any exception under term negotiation with regard to drawee?
we have a LC from issuing bank ABC in which we observed that

LC is available with
XYZ(our bank) by negotiation.
Draft : Sight
Drawee : XYZ(our bank)

It should be ''By payment''

As per UCP draft must be drawn on issuing bank. Since this is not the first time, we come across this kind of LC,Need
expert opinion to understand the rationale for issuance of such LC.
.
Regards
Dinesh Kumar

[picant]

Hi Pal,

IMHO, negotiation is used to cover issuing bank hamper to write payment. May be prohibited by local laws.
However check the reimbursement instructions on lc to determine if the lc is by payment or negotiation.
Other comments appreciated
Ciao