Uncategorized ENDORSEMENT OF DRAFTS By Mr Old Man Posted on March 5, 2013 1 min read 12 0 5,195 Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr QUESTION Dear Mr. Old Man, Please help me explain the reason why we as the negotiating bank always endorse drafts before sending the documents (whether negotiated by us or not ) to the issuing bank ? How do your bank do? Thanks a lot.AT —————- ANSWER Hi, As you may know, a draft or a bill of exchange is a negotiable instrument that can be transferred by the endorsement. Since the bill of exchange is normally issued payable to the order of the negotiating or the bank that presents the documents and the bill of exchange on behalf of the beneficiary to the issuing bank or the nominated bank, the negotiating/presenting bank must endorse the bill of exchange to transfer title of the instrument to the issuing bank or the nominated bank. The fact that the negotiating/presenting bank endorses the bill of exchange is to comply with the common practice and the laws on bills of exchange. Best regards,Mr. Old Man
IS THE NOMINATED BANK REQUIRED TO VERIFY WHETHER THE BENEFICIARY HAS AUTHORIZED THE PRESENTING BANK TO PRESENT THE DOCUMENTS?
CAN THE ISUING BANK CITE “LATE PRESENTATION” AS A DISCREPANCY SOLELY BASED ON THE DATE OF THE COVER LETTER?
IS THE NOMINATED BANK REQUIRED TO VERIFY WHETHER THE BENEFICIARY HAS AUTHORIZED THE PRESENTING BANK TO PRESENT THE DOCUMENTS?
CAN THE ISUING BANK CITE “LATE PRESENTATION” AS A DISCREPANCY SOLELY BASED ON THE DATE OF THE COVER LETTER?