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 2,562 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
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?