Payment at Sight

[Shahed]

Issuing bank received a complying presentation under a Sight L/C. How many days they can hold the payment.

Shall appreciate your expert comments.

Shahed

[BillSlowinski]

UCP600 Article 15 - When an issuing bank determines that a presentation is complying, it must honor. Article 2a- Honor means to pay at sight ....Article 14b banks have a maximum of five banking days...to determine if a presentation is complying... I am trying to understand your question. Once a sight presentation is determine compliant, the bank must pay. If your question is related to having agreements with customers to give a notice that their account will be charged for payment under an LC, can you take additional time for such notice? My opinion is that the examination, payment and notice should occur such that payment is made no later than on the third banking day after presentation of complying documents.

[JudithAutié]

OK -- how about credits that are available with the nominated (non-confirming) bank by payment but stipulate that reimbursement will be made X days after receipt of claim.

This has always been a subject for arguments between bankers themselves and also between bankers and beneficiaries.

Judith

[LarryE]

Judith makes a good point. If a credit is available by Payment you must assume the funds are readily available to the nominated bank. Once the documents have been found to comply by definition the nominated bank is suppose to be "able" to pay. Of course we all know what is really the case is while the nominated bank finds the documents in order, they are truly not taking up their nomination which is within their rights to do as they have not added their confirmation. My issue, which previously was in UCP 500, would the credit still expire at the nominated banks counters if they did not take up their nomination?

[DanielD]

See THE Commentary page 70
Daniel