Uncategorized WHETHER THE CONFIRMING BANK CAN DISCOUNT ITS OWN ACCEPTED DRAFT BEFORE FORWARDING THE DOCUMENTS TO THE ISSUING BANK By Mr Old Man Posted on July 28, 2015 1 min read 3 0 2,574 Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr (Source: Quoted from DCPro Discussion Forum 9 July, 2015) At God’s Well (Da Nang, Vietnam) QUESTION Bank A being an issuing bank requests Bank B to advise and confirm a term L/C to the beneficiary. L/C is available with Bank B by acceptable and draft drawn on Bank B (the Confirming Bank). Is there any problem with this structure, especially drawee is not an issuing bank? Can Bank B discount the bill presented by the beneficiary, before sending it to the issuing bank? Shahed Toronto ———- ANSWER Hi Shahed, Sub-article 12 (b) allows the nominated bank to discount (i.e., prepay or purchase) the draft that it has accepted or the deferred payment undertaking that it has incurred. So, I say yes to your question. If the documents presented by the beneficiary comply, Bank B as confirming bank must accept the draft and it can discount its own accepted draft at any time, including before forwarding the documents to the issuing bank. Kind regards, N.H.Duc