If the beneficiary's demand is presented to the issuing bank at 10.00 AM on 14 June (under a guanartee issued subject to local law/not any ICC rules) does the issuing bank is obligated to make payment on the same day?
If they make payment after 2 days of receipt of demand, can the beneficiary is entitled to claim any interest?
Regards,
Shahed
Toronto
[edited 6/14/2016 7:11:53 PM]
What is the meaning of demand
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HOANGTHIANHTHU_invalid
- Posts: 189
- Joined: Fri Apr 05, 2019 5:15 pm
What is the meaning of demand
Hi,
The issuing bank needs time to determine the compliance of the demand as well as to process the payment. Where the guarantee is not subject to ICC rules but local law, the timing depends on the local law. Taking Vietnam’s law on bank guarantees as an example, the guarantor is obliged to pay not later than 5 working days from the date on which the guarantor receives the valid demand from the beneficiary.
Notwithstanding that some local laws may be silent as to the time of payment, payment made after 2 days of receipt of the demand is reasonable. The beneficiary should not claim delay interest.
Kind regards,
N.H. Duc
[edited 6/20/2016 2:33:17 PM]
The issuing bank needs time to determine the compliance of the demand as well as to process the payment. Where the guarantee is not subject to ICC rules but local law, the timing depends on the local law. Taking Vietnam’s law on bank guarantees as an example, the guarantor is obliged to pay not later than 5 working days from the date on which the guarantor receives the valid demand from the beneficiary.
Notwithstanding that some local laws may be silent as to the time of payment, payment made after 2 days of receipt of the demand is reasonable. The beneficiary should not claim delay interest.
Kind regards,
N.H. Duc
[edited 6/20/2016 2:33:17 PM]