Nominated Bank Acting On Its Nomination
Posted: Sat Dec 12, 2009 10:37 am
Dear all,
Could anyone explain about the actual acting of a 'Nominated Bank'?
Could anyone explain about the actual acting of a 'Nominated Bank'?
Hi
As per Article 12-a of UCP 600 "Unless a nominated bank is the confirming bank, an authorization to honour or negotiate does not impose any obligation on that nominated bank to honour or negotiate, except when expressly agreed to by that that nominated bank and so communicated to the beneficiary.
When a nominated bank is not a confirming bank but expressly agreed to beneficiary that they would honour / negotiate a complying presentationion, such nominated bank is "acting on its nomination"
As per article 14a:Nominated bank actiong on its nomination must examine a presentation to determine whether complying or not.
As per article 14b: A nominated bank acting on its nomination, confirming bank if any and the issuing bank shall each a five banking days to determine if presentation is complying.
It is apparent that five banking days time is given to a nominated bank only when it is acting upon nomination.
As per 12c: Receipt or examination and forwarding of documents by a nominated bank that is not a confirming bank does not make that nominated bank liable to honour or negotiate, nor does it constitute honour or negotiation
Appreciate further clarification "when 5 banking days time is given for a nominated bank ACTING UPON NOMINATION, can we presume that there is no time period given a nominated bank which is NOT ACTING UPON NOMINATION
balaji.kas@ifts.org.in