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Hello
Anybody acting as a bank issuing UPAS (Usance Payable at Sight) would like to share the mechansim as to how the issuing bank books the transaction at the moment when L/C is paid at sight to beneficiary but reimbursement from the applicant is due on a certain maturity? I guess that the initial exposure will turn into a credit granted to applicant when payment is made!
Thanks in advance!

Dear cris,

1. Request NB to make a payment at sight and create an advance for the 90/120/180 days with specific LIBOR shared in the LC and make payment on such maturity date.

2. make a note in the LC to claim at sight from IB, once we have such request, we make a payment at sight and create advance against applicant. advance stats from the date of payment till tenor given in the LC(though it is not necessary to be given in the LC, it is just to maintain transparency in LC structure)

at the time of issuance, though it is sight, keeping mind of LATER possible request for an advance, For exposure against applicant, we calculate maturity date from the expiry date till tenor and at the time of payment, we will have exposure already booked against applicant.

Thanks &Regards
Dinesh Kumar