Reimbursements under Korean L/Cs

[Gart]

I still wonder what are the reasons for Korean banks while issuing their L/Cs to instruct negotiating banks to reimburse by beneficiary's drafts on their branches all over the world: it should be easier for them to handle the documents and payments from one office (the funds can easily be allocated between their branches these days easily) and the beneficiaries face extra courier and various banking charges...

[Judith]

Do you have a specific example of such an LC clause? i.e. where are the beneficiary, negotiating bank and reimbursing banks located?

One possible reason is that the bank that reimburses such drafts is actually financing the issuing bank and it is part of an off shore loan arrangement for the applicant.

[Gart]

We receive these L/Cs in favour of our customers (beneficiaries) and the L/Cs are available with any bank by negotiation (being ourselves in such cases) while reimbursing banks are the branches of the issuing banks usually located in London, NYC, Shanghai, Frankfurt / Main.