Bank A in Kenya issued an L/C and requested Bank B in Egypt to confirm the same against irrevocable reimbursement undertaking from Bank C in South Africa.
My question why not Bank A request Bank C to confirm the L/C instead of issuance of reimbursement undertaking ?
What is the difference ?
Shahed
Reimbursement undertaking
Reimbursement undertaking
Stupid answer maybe but it seems that the issuing bank and/or the beneficiary wants Bank B to handle and confirm the DC and bank B agrees to confirm it but only if it gets a reimbursement undertaking (here from Bank C which maybe does not even deal with documentary credits).
Daniel
Daniel
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HOANGTHIANHTHU_invalid
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Reimbursement undertaking
Hi Shahed,
A wise beneficiary would prefer an L/C confirmed by and available with a bank in his country rather than the one confirmed by and available with a bank in another country as it would be MORE CONVENIENT, SAFER and QUICKER for him to receive the payment once the complying documents are presented to the confirming bank (in his country).
The reimbursement undertaking issued by Bank C could be considered as a "counter guarantee" for Bank B to add its confirmation to the L/C.
Regards,
N.H.Duc
[edited 10/8/2009 11:35:06 AM]
A wise beneficiary would prefer an L/C confirmed by and available with a bank in his country rather than the one confirmed by and available with a bank in another country as it would be MORE CONVENIENT, SAFER and QUICKER for him to receive the payment once the complying documents are presented to the confirming bank (in his country).
The reimbursement undertaking issued by Bank C could be considered as a "counter guarantee" for Bank B to add its confirmation to the L/C.
Regards,
N.H.Duc
[edited 10/8/2009 11:35:06 AM]