Due date on national holiday

PhanThanhNhan · Post by **PhanThanhNhan** » Wed Apr 21, 2010 1:00 am

Pls give us your advice for the following case:
- Due date of bill in USD falls on Friday, but this Friday is national holiday in issuing bank's country (not New York holiday). So, on which day the issuing bank must effect payment (on Friday or on next Monday)?
.
Thanks for all of your kind advice.

DanielD · Post by **DanielD** » Wed Apr 21, 2010 1:00 am

Where is the bill payable?
Daniel

PhanThanhNhan · Post by **PhanThanhNhan** » Thu Apr 22, 2010 1:00 am

Can you comment in 2 cases:
1. LC payable in issuing bank counter
2. LC payable at negotiating bank

GlennRansier_ · Post by **GlennRansier_** » Thu Apr 22, 2010 1:00 am

The nominated bank authorized to accept drafts or create a deferred payment undertaking, or negotiate a non sight/time tenor is the party that sets the maturity date and that party determines the maturity date based upon their workday/holiday schedule. If only the issuer was allowed to honour they set maturity. If another party is nominated, the issuer must reimburse that party on or before that maturity that the nominated party set.

DanielD · Post by **DanielD** » Fri Apr 23, 2010 1:00 am

If the credit is available by acceptance with the issuing bank, the issuing bank will pay on Monday.
If the credit is available by acceptance with the nominated bank, it will pay on maturity date, assuming it is a banking day, and will request reimbursement for that date.
Daniel

PhanThanhNhan · Post by **PhanThanhNhan** » Mon Apr 26, 2010 1:00 am

Thanks for all of your kind advice.
.
1. But what for the case if the credit is available with ANY BANK by negotiation?
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2. How could the concept "where the bill is payable" be understood? Could you pls make clear this point? (The para 48 ISBP has mentioned this but it is not clear).
.
Thanks.

DanielD · Post by **DanielD** » Mon Apr 26, 2010 1:00 am

-Same reasoning with a credit available by negotiation with any bank. It is the place of the bank which negotiates that matters.
-A bill of exchange has always a place where it is payable.
If nothing is stated on the bill it will be the place of the drawee i.e. the holder of the bill will go to the drawee's place to get paid at maturity date. But it may also be a bank. In that case, at maturity, the bank will present the draft to the drawee or it will debit the account of the drawee in his books in order to credit the account of the the holder. It is a service rendred by the banks to their clients.
Daniel

PhanThanhNhan · Post by **PhanThanhNhan** » Fri May 07, 2010 1:00 am

Hi Daniel,
For the case 'AVAILABLE WITH ANY BANK': How can issuing bank determine whether presenting bank has negotiated the documents if there is no expression/certification from presenting bank?
.
Thanks.

GlennRansier_ · Post by **GlennRansier_** » Fri May 07, 2010 1:00 am

An issuer does not generally assume anything. They might make an exception is the LC was confirmed and the confirmer forwarded the documents certifing all terms complied with. However, banks also examine other bank cover letters that accompany presentations to determine if: the presenter was a nominated bank and if they are, to determine if they had accepted their nomination and honoured or negotiated.

DanielD · Post by **DanielD** » Sat May 08, 2010 1:00 am

I agree with Glenn. The issuing bank does not care if the documents have been negotiated or not. Not its business. On receipt of them if they comply, IB must pay.