IFC guarantee.

[dinesh2476]

IFC guarantee.

We ,nominated bank, adding confirmation basis the IFC guarantee, LC is usance LC with 180 days bill of lading date.

LC expires on 25 Jan 2020 and IFC guarantee also states expires on 25th Jan 2020 with an Indication that in case of default,payment can be ascertained at IFC counter by making claim.

my understanding is claim has to be made before the expiry date of the guarantee i.e 25th Jan 2020 to get reimbursed.

Need expert opinion to understand, What if complying presentation made before the expiry date at nominated bank counter and default situation happening during the period of tenor( 180 days from the bill of lading date)

As a nominated bank how do we cover ourselves from the default situation described in the guarantee as by then guarantee has already been expired

Thanks & Regards
Dinesh Kumar

[dinesh2476]

Dear Expert,

Any opinion welcome.

Are there any process that IFC guarantee be issued covering usance period greater than the LC expiry date or IFC must be issued covering the LC expiry date alone?

Thanks & Regards
Dinesh Kumar

[Sanaur]

Hi
As far as I experienced, confirming bank should make claim to IFC after the maturity date but within a certain period of time (say, 30 days) only if issuing bank did not reimburse the confirming bank.

I would suggest to check the terms and conditions that was signed and exchanged (often called, Inter-Bank Agreement) between confirming bank and IFC. IBA specifically mention the conditions and method to claim Reimbursement.

Though IFC guarantee expires along with DC expiry/Bill Maturity, it allows claim till certain period of time. No worries!

[TaiOanlan]

I reckon that a confirming bank`s confirmation should have covered not just till LC expiry but whole usance tenor in case of usance LC. Therefore, a confirming bank would request IFC to issue guarantee with validity covering whole tenor.

[dharya]

Thanks for the information.