Issuing bank issued a usance LC available with the confirming bank payable at sight basis for the beneficiary and interest to the account of Applicant.
On shipment, beneficiary presented documents and obtained payment as per LC terms from Confirming bank(Negotiating bank)
Confirming bank forwarded the documents to issuing bank who provided acceptance under the LC
However, prior to maturity issuing bank approached the confirming bank for extension of maturity date by 60 days.
1) Does the Negotiating bank(confirming) require beneficiary's amended draft for the extended tenor (Documents were paid on sight basis as per terms of the Credit)
2) Can the negotiating bank extend tenor based on Issuing bank's request alone?
[edited 5/23/2007 8:59:24 PM]
Extension of Maturity under LC
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PetrovSergey
- Posts: 4
- Joined: Fri Apr 05, 2019 5:26 pm
Extension of Maturity under LC
Am I right to understand that LC was issued available by acceptance of usance drafts drawn on IB?
In my view since the Nominated bank negotiated the docs + drafts on fixed terms the amendment of maturity of the draft must be accepted by it solely (i.e. bene's consent is not required)
Would be very interesting to hear from colleagues and experts their opinion how to proceed in case negotiating bank accepts to extend maturity of drafts already discounted.
Best regards,
Vladimir
In my view since the Nominated bank negotiated the docs + drafts on fixed terms the amendment of maturity of the draft must be accepted by it solely (i.e. bene's consent is not required)
Would be very interesting to hear from colleagues and experts their opinion how to proceed in case negotiating bank accepts to extend maturity of drafts already discounted.
Best regards,
Vladimir
Extension of Maturity under LC
Vinod,
If -as you seem to suggest- the beneficiary has already received settlement this is a matter purely between nominated bank and issuing bank. My experience is that such requests occur from time to time.
Jeremy
If -as you seem to suggest- the beneficiary has already received settlement this is a matter purely between nominated bank and issuing bank. My experience is that such requests occur from time to time.
Jeremy
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AbdulkaderBazara
- Posts: 256
- Joined: Fri Apr 05, 2019 5:15 pm
Extension of Maturity under LC
Agree with Jermey. Usually, as the case seems to be here, if the discounting / negotiation is without recourse, the beneficiary, once paid, is no more interested. The nominated bank that agreed to discount or negotiated the bill / documents is comfortable with the risk of the issuing bank. Any subsequent extension to due date, in such cases, may not require beneficiary's involvement.
I have seen such indirect post-financing for imports to applicant, even under sight LCs.
This is usually done with prior agreement between the issuing bank and the nominated bank. To protect its legal rights, as the case maybe, the nominated bank may request for addition documents.
regards
Abdulkader
I have seen such indirect post-financing for imports to applicant, even under sight LCs.
This is usually done with prior agreement between the issuing bank and the nominated bank. To protect its legal rights, as the case maybe, the nominated bank may request for addition documents.
regards
Abdulkader