Can a Beneficiary Present Directly to the Issuing Bank? Intro In the world of letters of credit, everyone loves a shortcut — especially when it promises faster payment. It’s no surprise that beneficiaries often ask Mr. Old Man: “Why don’t I just send the documents straight to the issuing bank? Wouldn’t that speed things up? The confirming bank can be skipped, right?” It sounds simple, but in LC operations, … Read More
Unit Price in Invoice vs. Proforma Invoice – Discrepancy or Not? Intro Again, folks! Time for another round of LC puzzles with Mr. Old Man. This week’s classic case comes from the Himalayas (yes, the literal Himalayas!) where our friend Suraj at Himalayan Bank is wondering: “If the unit price in a presented commercial invoice differs from what was in the proforma invoice used when the LC was issued—but the LC … Read More
Freight Collect Vs. Freight As Arranged – Discrepancy or Not? Quick Question, Quick Answer by Mr. Old Man — 30 Seconds. Too fast too furious??? Read More
Insurance Documents Under LC – Clarifications on Endorsement, Issuance, and Coverage Dear Mr. Old Man, Greetings of the day. Hope this email finds you well. I would like to seek your opinion/clarification for the below scenario. All these doubts pertain to the insurance document presented under a Letter of Credit (LC). Query 1 LC Requirement: Insurance in negotiable form and blank endorsed. Scenario: The insurance document shows the assured as the … Read More
Consignee in the Bill of Lading — How Far Can “On Behalf Of” Go? Intro: When it comes to the consignee field on a Bill of Lading under an export LC, wording matters — sometimes down to a single phrase like “on behalf of” or “for the account of.” A small variation can change how banks interpret the document and who needs to endorse it. This week’s question from Xona Woo looks at two … Read More
One Shipment by Sea, One by Air — How Should the Description of Goods Appear on the B/L? When part of an LC shipment goes by sea and another part goes by air, things can get a little tricky with document presentation. Should the Bill of Lading still reflect both items listed in the credit, or only the goods actually shipped by that mode of transport? Let’s look at what ISBP 821 says — and how to apply … Read More
Who Bears the Risk? Understanding Issuing vs. Nominated Bank Responsibilities under Different LC Availabilities “By payment”, “by negotiation”, “by deferred payment”, “by acceptance” — same LC, different risks. But who really carries the burden when things go wrong?” A common question from trade finance practitioners — and one that sparks more debate than you’d expect. When an LC says “by payment” or “by negotiation”, who really bears the risk if things go sideways? Let’s … Read More
Full Means Full — Describing the Goods in Line with ISBP 821 Intro Sometimes, the devil really is in the description. A letter of credit may ask for a “full description of goods,” and exporters wonder whether they can simplify the wording in their invoice — especially when only one mode of shipment applies. This question from Mr. Nishanth is a good example of how to balance what’s required by the LC … Read More
Commitment Fee After LC Expiry — Still Chargeable? Intro: A reader recently asked an interesting question about fees under a letter of credit. When an LC expires, does that mean the applicant no longer has to pay commitment fees to the issuing bank? Let’s take a closer look. __________ Question: Good morning, Sir! Thank you so much for all your efforts in making trade finance information more accessible. … Read More
When the Bill of Lading indicates “Intended Port of Discharge” and “Place of Delivery” — What does ISBP 821 E8(b) say? Sometimes a Bill of Lading can make bankers frown for all the wrong reasons. We’ve seen cases where it shows an “intended port of loading” and that’s fine under UCP 600, but what about when it shows an “intended port of discharge” instead? Does that make it discrepant? Let’s see what happens when Durban plays both roles — as the … Read More