due date on holiday

svishu · Post by **svishu** » Thu May 26, 2011 1:00 am

The credit is available with the nominated bank by deferred payment. Documents in USD presented and acceptance message was sent by issuing bank. LC provided reimbursement authority to claim funds on due date from the usd correspondent. The due date fell on a saturday, on which USD correspondent is closed. Hence the funds were received by nominated bank on monday. Can the nominated bank claim interest for 2 days ?

Regards
Vishu

NigelHolt · Post by **NigelHolt** » Thu May 26, 2011 1:00 am

No and furthermore the nominated bank could logically not have made payment value that Saturday anyway.

svishu · Post by **svishu** » Thu Jun 02, 2011 1:00 am

Thanks Smith.
In case the nominated bank is open and working on saturday, would your opinion change ?
Regards
Vishu

NigelHolt · Post by **NigelHolt** » Thu Jun 02, 2011 1:00 am

No, because -unless I am missing something- one can only have a value date for USD when NY is open.

GlennRansier_olsABN · Post by **GlennRansier_olsABN** » Thu Jun 02, 2011 1:00 am

Hi Jeremy,
I am not so sure. The issuer confirmed the due date provided by the nominated bank. They could have ensured payment on Friday or conversely indicated the due date as Monday. How far should a nominated bank have to go to ensure they receive payment on a due date confirmed by the issuer? Should the bank check the holiday schedules for the currency and issuer's country? If issuer confirms a date they should bear the responsibility to have payment made on or before the due date they have provided.

NigelHolt · Post by **NigelHolt** » Thu Jun 02, 2011 1:00 am

I beg to differ Glenn. Any competent bank must know the non-business days of the financial centre of the currencies in which it effect transactions and therefore give value. Suffice it to say I regard the first sentence of para 48 ISBP681 as not reflective of reality or practicality.

GSham · Post by **GSham** » Thu Jun 09, 2011 1:00 am

Since the USD LC is available with the nominated bank by deferred payment, the nominated bank should specify the first banking day after the NY holiday as the due date of its deferred payment undertaking.