Does a Presentation under a SBLC After the Stipulated Time Become a Next-Business-Day Presentation?

Intro

A question has been raised regarding the interaction between ISP98 Rules 9.04 and 3.05(b) where a standby specifies a presentation time earlier than the bank’s normal close of business. The key issue is whether a presentation after the stipulated time, but before close of business, can be treated as having been made on the next business day.

Question

Hello Sir,

Hope you’re doing well.

Clarification required regarding ISP 98 Rule 9.04 and Rule 3.05 (b).

(1) ISP 98 Rule 9.04 – Time of Day of Expiration

If no time of day is stated for expiration, it occurs at the close of business at the place of presentation.

and

(2) ISP 98 Rule 3.05 – When Timely Presentation Made

2. A presentation made after the close of business at the place of presentation is deemed to have been made on the next business day.

   If Standby Expires on 05 Nov 2026 and Standby States that Documents to be presented within 2.00 pm on the day of presentation (whereas, business hour ends at 5.00 pm), but the documents were presented at 2.30 pm on the day of presentation (e.g. 02 Nov 2026), then will the presentation to be treated having occurred on the next business day (i.e. 03 Nov 2026) ???

   Thanks in advance, Sir.

   Regards,

   Khandakar

____

Answer

Dear Khandakar,

Thank you for your question.

Where a standby requires documents to be presented “within 2:00 pm” and this is construed as “not later than 2:00 pm,” a presentation made at 2:30 pm is a late presentation. It is not treated as having been made on the following business day merely because the bank’s normal business hours continue until 5:00 pm.

Best regards,

Mr. Old Man