IS it correct or incorrect: under an acceptance credit and as per Art 12(b), the nominated bank can prepay(discount) the draft after waiting for and upon receipt of the issuing bank's confirmation of the due date.
I think the it is very confusing and seek help!
thanks!
Under 12b Nominated Bank Wait For Issuing Banks Acceptance
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Allan
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Veerla
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Nominated Bank
It appears that the time draft is drawn on the Issuing Bank. If that's the case then Acceptance advised by the Issuing bank to the Nominated Bank becomes imperative.
In the specific context of 12(b) it refers to a draft, deferred payment undertaking (ie Bank gives an undertaking to pay the usance bill on due date). As I understood from IFS Guide that Draft is a financial doc being part of the dox under the LC.
Time Bills are not paid on presentation but on maturity.
If it's a Draft on the Issuing Bank then the Issuing bank accepts the draft & confirms to pay on maturity date, advised to the Nominated Bank.
In the case of Draft drawn on the Nominated Bank the NB gives a Deferred Payment Undertaking (to pay on maturity). In both cases the rest of the dox are assumed to be compliant.
When it comes to discounting
a) if the NB gave the DFU the NB discounts & pay the Beneficiary
b) if the Draft was on the Issuing Bank (assumed to have accepted it upon complying dox), the Issuing bank got to advise the Nominated Bank whereby the NB discounts & pay the Beneficiary.
Wish I were clearer.
critical views are welcome.
In the specific context of 12(b) it refers to a draft, deferred payment undertaking (ie Bank gives an undertaking to pay the usance bill on due date). As I understood from IFS Guide that Draft is a financial doc being part of the dox under the LC.
Time Bills are not paid on presentation but on maturity.
If it's a Draft on the Issuing Bank then the Issuing bank accepts the draft & confirms to pay on maturity date, advised to the Nominated Bank.
In the case of Draft drawn on the Nominated Bank the NB gives a Deferred Payment Undertaking (to pay on maturity). In both cases the rest of the dox are assumed to be compliant.
When it comes to discounting
a) if the NB gave the DFU the NB discounts & pay the Beneficiary
b) if the Draft was on the Issuing Bank (assumed to have accepted it upon complying dox), the Issuing bank got to advise the Nominated Bank whereby the NB discounts & pay the Beneficiary.
Wish I were clearer.
critical views are welcome.