Letter of Credit Forum

I think the approach taken by the issuing bank would be  influenced by the wording of the "collection" schedule. 

Many banks, on being instructed to send the documents forward on "approval", despatch using their standard "collection" schedule, which is preprinted with wording that the documents are being forwarded on "collection" under URC522. If this is the case, I suggest that the issuing bank would be absolved of its reponsibility under the LC, and will only pay (at sight or at maturity) subject to applicants/drawee's approval and funds being at its disposal. It simply becomes a paying agent for the applicant.

However, if the documents have been forwarded "on approval" under protection of UCP600, then the issuing bank is fully engaged thereunder, and has to follow all relevant procedures. They would be obliged to check the documents, and revert within five days with formal notice of rejection, and that they are seeking waiver, etc. If the issuing bank fails to follow this, they would be obliged to pay.

So, it depends on which of the ICC rules have been invoked, and also the exact wording used by the issuing bank in its "acceptance".

As to whether reference to the LC number inadvertently engages the issuing bank is a moot point, but may be an influencing factor if read in context with the other information, as stated above.