Grace Period For Negotiation In Sight LC

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vlad
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Grace Period For Negotiation In Sight LC

Post by vlad » Mon Oct 27, 2014 7:04 pm

Hi everybody,

Would appreciate if anybody can explain me what a grace period is in the following situation - an l/c is issued by a Chinese bank and available with any bank by negotiation with drafts at SIGHT FOR 100PCT OF INVOICE VALUE. A negotiating bank is ready to discount the draft under the l/c but the GRACE PERIOD it will apply FOR SIGHT L/C WILL BE 8 WORKING DAYS.
So my question is what the grace period is in this particular case and why it may take up to 8 working days?
thank you for your feedback in advance.

Regards,

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picant
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Banking Days

Post by picant » Sat Nov 15, 2014 1:46 am

Hi Pal,

grace period means the possible difference between the value date of proceeds given to the beneficiary and the effective date of credit entry received from the issuing bank.
In discounting a draft too, the period of interests is calculated by adding few days, 3 or 4 necessary to cash the draft,in international transaction this period is enlarged to 8 - 10 days due to the spot value and time areas.
Hoping to have been clear.
Ciao

vlad
Posts: 3
Joined: Fri Oct 10, 2014 1:15 am
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Last Name: vlad
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Filter: Two Plus Two =: 4

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Post by vlad » Thu Nov 27, 2014 9:36 pm

Hi picant ,

Thank you very much for your reply.

Enjoy your day!

Regards

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