documents for l/c presented on 522
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lucettelessard
- Posts: 8
- Joined: Fri Apr 05, 2019 5:21 pm
documents for l/c presented on 522
when letter of credit are issued they are subject to UCP500. we have noticed lately that when we receive documents under remittance letters issued by any Indian Bank they are subject to uniform rules for collection publication no 522 even though they refer to a letter of credit, It is creating a great confusion for the bank and customers.would this be a law in some cuntries?
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hatemshehab
- Posts: 220
- Joined: Fri Apr 05, 2019 5:19 pm
documents for l/c presented on 522
Mind you, this is a very tricky issue and risky as well. First of all you have to make sure that:
1. The presentation of documents by the advising bank is not to avail from the letter of credit.
2. The remittance schedule does not refer whatsoever to the L/C established by you. It could refer to L/C number and date of issuance, etc.,
3. The remittance schedule do not refer to UCP 500
Then after all this, although it may sound funny, make sure before you take a decision to treat the documents under collection, to alarm the advising bank that the documents are no more protected under the documentary credit mandate by a swift message. The fact that the remittance schedule indicates that the documents are for collection under 522 is not enough for you to be protected. WHY? Indian banks have many funny procedures as they depend on manpower and not systems and since so many people can be involved you will find that may be every one has his own procedures. Secondly, due to budget restrictions as it could be that the employee used the remittance schedule in lieu of the documentary schedule designated for the L/Cs because the later is out of stock or because the employee have seen his colleagues doing that or he has not been PENALISED, by smart bankers like you. If I were you I would write to the top management outlining this, especially if the bank is your correspondent bank. This is the job of the correspondent banks department as well.
Since your letter of credit was issued subject to UCP 500 you should handle the documents under UCP 500, despite the fact that the advising bank sent the documents under a schedule referring to URC 522, of course if there is any reference to the L/C.
The risk could be extended to the beneficiary who might not be aware of this PLIGHT OR DISASTER, because if the documents are treated under 522 then the whole protection given to the beneficiary by virtue of the credit will be lost in the ocean of ignorance of the advising bank if the advising bank has acted without consulting the beneficiary about this.
[edited 11/8/01 8:49:12 AM]
1. The presentation of documents by the advising bank is not to avail from the letter of credit.
2. The remittance schedule does not refer whatsoever to the L/C established by you. It could refer to L/C number and date of issuance, etc.,
3. The remittance schedule do not refer to UCP 500
Then after all this, although it may sound funny, make sure before you take a decision to treat the documents under collection, to alarm the advising bank that the documents are no more protected under the documentary credit mandate by a swift message. The fact that the remittance schedule indicates that the documents are for collection under 522 is not enough for you to be protected. WHY? Indian banks have many funny procedures as they depend on manpower and not systems and since so many people can be involved you will find that may be every one has his own procedures. Secondly, due to budget restrictions as it could be that the employee used the remittance schedule in lieu of the documentary schedule designated for the L/Cs because the later is out of stock or because the employee have seen his colleagues doing that or he has not been PENALISED, by smart bankers like you. If I were you I would write to the top management outlining this, especially if the bank is your correspondent bank. This is the job of the correspondent banks department as well.
Since your letter of credit was issued subject to UCP 500 you should handle the documents under UCP 500, despite the fact that the advising bank sent the documents under a schedule referring to URC 522, of course if there is any reference to the L/C.
The risk could be extended to the beneficiary who might not be aware of this PLIGHT OR DISASTER, because if the documents are treated under 522 then the whole protection given to the beneficiary by virtue of the credit will be lost in the ocean of ignorance of the advising bank if the advising bank has acted without consulting the beneficiary about this.
[edited 11/8/01 8:49:12 AM]
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larryBacon
- Posts: 689
- Joined: Fri Apr 05, 2019 5:26 pm
documents for l/c presented on 522
I have seen similar cases where a standard preprinted covering letter with an option to tick a box indicating that the attached documents related to UCP or another box indicating URC.
The trouble with something like this is that sometimes the wrong box is ticked, sometimes the tick is between the boxes and sometimes there is no tick.
I too found these coming from the Indian sub-continent, but sometimes the issuing bank concerned did not have access to SWIFT, so communications tended to be protracted.
The trouble with something like this is that sometimes the wrong box is ticked, sometimes the tick is between the boxes and sometimes there is no tick.
I too found these coming from the Indian sub-continent, but sometimes the issuing bank concerned did not have access to SWIFT, so communications tended to be protracted.