Mr Old Man Q&A WHETHER THE MASTER LC SHOULD BE CONFIRMED By Mr Old Man Posted on September 6, 2023 1 min read 0 0 1,043 Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr QUESTION Dear Mr. Oldman, While issuing a back-to-back LC, should the master LC be confirmed by the bank? What are the advantages of confirming the master LC? Regards Rohini — ANSWER Hi, The master LC and the back-to-back LC are separate. So, the master LC is regarded as an independent LC. If it is issued by a weak bank or a bank in high-risk countries (financial crisis, political crisis, war risk), the beneficiary (the trader) should insist an LC confirmed by a world class bank to guarantee the payment. The bank of the trader would rather accept to issue the back-to-back LC based on a confirmed master LC than an LC without confirmation. 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?