Reimbursing bank not paying help needed
Posted: Thu Oct 07, 2021 2:55 pm
Hi all,
+ Issuing bank = Bank A (Central Bank of an Asian country)
+ nominated bank, reimbursing bank, advising = bank B (Larger Village Bank - International bank... operating in larger villages
)
+ LC issued, irrevocable, payment at sight by payment, at Bank B
Expiry Date xx.xx.xxxx. at bank B
reimbursement instructions: Please debit our account xxxx (which the issuing bank holds with the same bank B) for the amount 237,500 USD and confirm to us the amount utilised via Swift
Case:
a.) Bank B (which is our bank and by chance the correspondent bank of the issuing Bank A) advises the LC to us and debits advising charging from our account.
b.) We presented the documents at the counters to Bank B on time. Bank B sent the documents to Bank A for confirmation. In the remittance letter accompanying the documents and via Swift, Bank B confirms to bank A, that Bank B will debit Bank A account with the amount of 237,500 USD once Bank A confirms the documents and approves it.
Also Bank B sents 3 Swift messages to Bank A, asking for approval and once approved Bank B confirms that it will debit the account of Bank A and credit the amount to the beneficiary.
b.) Bank A sents Swift message to Bank B, approving the documents and asking Bank B to credit the amount to the beneficiary (my company).
Nothing after Bank A sent approval to Bank B happens for a week and then we get an email from Bank B saying:
the documents at our counter were forwarded to the issuing bank of the LC i.e. for their acceptance. The role of BANK B was restricted only to advise the LC to your good self.
With reference to mentioned L/C please be advised that due to our bank policies we are not in a position to participate in this letter of credit. This notice has been provided to you in compliance with article 9e of UCP 600, and should enable you to pursue other alternatives for the handling of this specific transaction. We request your good self to kindly contact with the applicant directly.
to Bank A, Bank B sent the following SWIFT 2 days later:
" We regret to inform you that we are unable to participate in this transaction as per internal policies of our bank and request you to settle the same directly with the presenter"
Questions:
a.) Can Bank B do this suddenly? didnt they commit to Bank A that they will do the transfer as instructed in the LC once Bank A approves?
WE only agreed to the LC in the first place, because of the payment instruction in the LC and because Bank B told Bank A via SWIFT and to us verbally that they will pay once Bank A approves the document.
What do you all think? thank you so so much for your help!
+ Issuing bank = Bank A (Central Bank of an Asian country)
+ nominated bank, reimbursing bank, advising = bank B (Larger Village Bank - International bank... operating in larger villages
)+ LC issued, irrevocable, payment at sight by payment, at Bank B
Expiry Date xx.xx.xxxx. at bank B
reimbursement instructions: Please debit our account xxxx (which the issuing bank holds with the same bank B) for the amount 237,500 USD and confirm to us the amount utilised via Swift
Case:
a.) Bank B (which is our bank and by chance the correspondent bank of the issuing Bank A) advises the LC to us and debits advising charging from our account.
b.) We presented the documents at the counters to Bank B on time. Bank B sent the documents to Bank A for confirmation. In the remittance letter accompanying the documents and via Swift, Bank B confirms to bank A, that Bank B will debit Bank A account with the amount of 237,500 USD once Bank A confirms the documents and approves it.
Also Bank B sents 3 Swift messages to Bank A, asking for approval and once approved Bank B confirms that it will debit the account of Bank A and credit the amount to the beneficiary.
b.) Bank A sents Swift message to Bank B, approving the documents and asking Bank B to credit the amount to the beneficiary (my company).
Nothing after Bank A sent approval to Bank B happens for a week and then we get an email from Bank B saying:
the documents at our counter were forwarded to the issuing bank of the LC i.e. for their acceptance. The role of BANK B was restricted only to advise the LC to your good self.
With reference to mentioned L/C please be advised that due to our bank policies we are not in a position to participate in this letter of credit. This notice has been provided to you in compliance with article 9e of UCP 600, and should enable you to pursue other alternatives for the handling of this specific transaction. We request your good self to kindly contact with the applicant directly.
to Bank A, Bank B sent the following SWIFT 2 days later:
" We regret to inform you that we are unable to participate in this transaction as per internal policies of our bank and request you to settle the same directly with the presenter"
Questions:
a.) Can Bank B do this suddenly? didnt they commit to Bank A that they will do the transfer as instructed in the LC once Bank A approves?
WE only agreed to the LC in the first place, because of the payment instruction in the LC and because Bank B told Bank A via SWIFT and to us verbally that they will pay once Bank A approves the document.
What do you all think? thank you so so much for your help!