ICC Digital Library Forum

Bank A has issued a deferred payment L/C (subject to UCP600) with a condition to pay to the beneficiary at sight basis.

L/C states at the request of the beneficiary the issuing bank will pay to the beneficiary at sight.

Basically the issuing bank will discount its own commitment.

My questions are can any issuing bank discount the export bill which is under its own L/C? [ii]If so, is it appropriate to use the word "discount" here ? or it should state "pre-pay" or "purchase"?

Regards,

Shahed
Toronto

I would interpret this as providing that upon incurring a deferred payment undertaking the issuer "will", meaning must, pay at sight if the beneficiary so requests. It leaves unclear whether the "sight payment" would be a purchase or a payment of the issuer's incurred DPU. More important, it leaves unclear the basis on which the amount paid may be less than the amount of the incurred DPU. I don't see that applying the word "discount" helps.

If I were the beneficiary, I would want a clearer undertaking to pay or purchase the incurred DPU - a clearer commitment and specified terms.

Regards, Jim Barnes