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Adding confirmation as 2nd advising bank

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Mon, 06/22/2009 - 05:20
surge1977
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Joined: 05/05/2009
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Hi,

An lc has been advised to the beneficiary by Bank A. The beneficiary has given a copy of the lc to Bank B asking them to negatiate docs as the lc is available with any bank. My question however is this, the lc is MAY ADD with regards to confirmation so can Bank B add open confirmation to this or does this MAY ADD only apply to Bank A?

Regards   

 

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Tue, 06/23/2009 - 06:06
#1
Peter M
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Joined: 09/02/2008
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Confirmation and negotiation

If the L/C is "available with any bank by negotiation" and the bank the beneficiary chooses agrees to negotiate, then there is no need for confirmation as the negotiating bank will pay the beneficiary  prior to obtaining reimbursement and they are taking the issuing bank/country risk in the negotiation of the documents.

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Tue, 06/23/2009 - 03:30
#2
tulsi
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Joined: 04/09/2008
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Confirmation Of L/C

As you mentioned, the bank will not negotiate the documents with copy of L/C. Bank is negotiating the documents as per L/C terms with the original L/C.

You can submit this L/C to any bank, since the L/C is unrestricted. Also any bank can add the confirmation of this L/C.

 

Contact: tulsiusha1@yahoo.com      or tulsipillaiex@hotmail.com

  

Regards

Tulsi/ Dubai

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Tue, 06/23/2009 - 03:40
#3
Catalyst
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Joined: 06/15/2007
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Adding confirmation to LC

Tulsi/Dubai 

 I am not in agreement with your statement "Also any bank can add the confirmation of this L/C". Pl refer to the reply by LC Sam.

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Mon, 06/22/2009 - 11:20
#4
LC Sam
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Joined: 08/09/2007
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May Add Confirmations

Hi surge1977,

The "MAY ADD" on the letter of credit is the instructions onf the issuing bank to the advising bank only. So in your case the instructions would only apply to Bank A.

I hope this helps you out.

Best regards,

LC Sam

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Tue, 06/23/2009 - 06:55
#5
sravanabalaji
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Joined: 08/21/2008
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Hi, Agree with LC Sam,

Hi,

Agree with LC Sam, however incase if the beneficiary wants Bank B to confirm the Lc and if the Bank B is prepared to confirm the Lc, it can still do it by either of following means -

1. Bank B can seek Issuing Banks authorisation to do so and based upon such authorisation, Bank B can confirm the Lc.

2. Otherwise, Bank B can add Silent confirmation. This is normally subject to their internal policies in view of various risks involved.

Hope this help you..,

Regards...

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