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detrimental Amendments

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Wed, 10/20/2010 - 06:13
Palani
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Joined: 08/29/2010
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At the time of issuance , the charges ( incl discount, interest and acceptance) are for applicant account . In the amendment it has revised that " all charges are for account of beneficiary"( incl discount, interest and acceptance). Kindly advise me will amendment be detrimental on view of  issuing bank.

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Wed, 10/20/2010 - 12:01
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vinodep
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Joined: 06/21/2008
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uncollected charges issuing banks responsibility

Article 37 Disclaimer for Acts of an Instructed Party a. A bank utilizing the services of another bank for the purpose of giving effect to the instructions of the applicant does so for the account and at the risk of the applicant. b.  A bank instructing another bank to perform services is liable for any commissions, fees, costs or expenses (“charges”) incurred by that bank in connection with its instructions. If a credit states that charges are for the account of the beneficiary and charges cannot be collected or deducted from proceeds, the issuing bank remains liable for payment of charges. Hence we need not classify this as an amendment detrimental to the interest of the beneficiary. Beneficiary can indicate his unwillingness to pay such charges and issuing bank would be liable

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