Best Trade Solution

dear friends

LC: 60 days sight by negotiation

bank abc present the doc to the issuing bank and obtain acceptance. however the bank refuse to negotiate the draft. now the beneficiary is asking for a assignment of proceeds so that he can have the document negotiated with some other bank.

my question is; is it possible to apply article 39 at this stage?

regd

shahriar

Dear shahriar,
i don't understand your following line,
"now the beneficiary is asking for a assignment of proceeds so that he can have the document negotiated with some other bank. "
pls explain a bit more, i don't understand the relationship between assignment of proceeds and negotiation.
regards
nesar

dear nesar,

the acceptance from the issuing bank is on ABC bank. now since abc bank dont want to negotiate the document, the beneficiary wants xyz bank to negotiate / purchase / prepay / discount the document.

but xyz bank is saying that the proceed is suppose to come to the ABC bank and the bank will pay the beneficiary, not xyz bank.

now there is two option.
1. ABC bank issues an undertaking to xyz bank that on realization they will transfer the fund to xyz bank. why they would do that? some credit forum will answer better.

2. beneficiary assigns the proceeds to xyz bank

nowmy question is since the issuing bank has already given its undertaking to abc bank, it is possible now?

regd

shahriar

I think no banker will agree to do it.
In acceptance the Issuing Bank give commitment to the Presenting Bank to pay its bill on maturity date.At maturity date the Issuing Bank pay the bill value according to presenting Bank instruction.

Beside this each Bank has its guideline to discount or purchase the bill?
I am in doubt whtther any bank internal policy allow this.