lc available by acceptance
Post 1 of 3
Hi,
can lc be made available by acceptance with any bank in beneficiary's country? if it can be, then plz let me know why a particular bank in bene's country be interested in accepting the drafts without any reward. i mean that bank will only assume risk in accepting the drafts that have the possibility of being refused by applicant bank should that applicant bank point out any minor discrepancy. My question is why any bank will accept drafts if lc is available by accpetance with any bank?????
Curious spider man
can lc be made available by acceptance with any bank in beneficiary's country? if it can be, then plz let me know why a particular bank in bene's country be interested in accepting the drafts without any reward. i mean that bank will only assume risk in accepting the drafts that have the possibility of being refused by applicant bank should that applicant bank point out any minor discrepancy. My question is why any bank will accept drafts if lc is available by accpetance with any bank?????
Curious spider man
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18 Oct 2007 13:37
Post 2 of 3
Replying to [spider man]:
I can give a long answer or a short answer!![[em1]](http://img.alibaba.com/images/eng/style/icon/emoticons_smile.gif)
. Since this is not the place for a long answer, I will stick to the easier option, i.e., give a short answer.
The answer lies in a similar (but more familiar) situation: "Knowing the issues involved (being similar to what has been outlined in the question asked by spider man), why should a bank confirm an LC?"
I can give a long answer or a short answer!
. Since this is not the place for a long answer, I will stick to the easier option, i.e., give a short answer.The answer lies in a similar (but more familiar) situation: "Knowing the issues involved (being similar to what has been outlined in the question asked by spider man), why should a bank confirm an LC?"
20 Oct 2007 04:10
Post 3 of 3
Replying to [catalyst]:
the (confirming) bank will confirm only those lcs which are opened by those issuing banks whose credit lines are maintained with the confirming bank. Besides that, the motive behind confirming the lc is to earn confirmation commission.
Furhtermore ( i am not sure about this, please correct me if i am wrong), in case of confirmed lcs, issuing banks restrict negotiation with confirming bank. In that way they give business to confirming bank. These are the motives behind confirming the credit.
My questions remains, what is the motive behind accepting the draft by any bank in bene's country? Why would any bank accept drafts ic case of usance lc? how can lc be made available by acceptance with any bank? Can it be practically done?
the (confirming) bank will confirm only those lcs which are opened by those issuing banks whose credit lines are maintained with the confirming bank. Besides that, the motive behind confirming the lc is to earn confirmation commission.
Furhtermore ( i am not sure about this, please correct me if i am wrong), in case of confirmed lcs, issuing banks restrict negotiation with confirming bank. In that way they give business to confirming bank. These are the motives behind confirming the credit.
My questions remains, what is the motive behind accepting the draft by any bank in bene's country? Why would any bank accept drafts ic case of usance lc? how can lc be made available by acceptance with any bank? Can it be practically done?
20 Oct 2007 07:55
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