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DRAFTS NOT BE ENDORSED

Sat, 02/21/2009 - 00:51 — Gane

Dear All,

Please note: we have negotiated our export document with all terms and conditions of LC have been fully complied with in our bank.

but after one week we have received one discrepancy msg from opening bank that:

" +DRAFTS NOT BE ENDORSED

+DISPOSAL OF DOCS:/NOTIFY/

+WE TREAT THIS AS MT734."

and after my bank sent a reply to opening bank that "PLEASE NOTE THAT DRAFT ARE THE FINANCIAL DOCS UNDER NEGOTIABLE INSTRUMENT ACT. WE AS XYZ BANK ARE HOLDER OF THE DRAFT IN DUE COUSE. HENCE THERE IS NO NECESSARY FOR US TO ENDORSE THE BILL OF EXCHANGE FURTHER. SO YOUR DISCREPANCY STANDS INVALID."

So please advice me about this matter.

Thanks & Regards

Gane / Dubai.

 

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Sat, 02/21/2009 - 08:01 — LC Specialist

DRAFTS NOT BE ENDORSED

Draft should be endorsed ....

lcspecialist@yahoo.com

Mon, 02/23/2009 - 03:43 — ImranUmer

Drafts Endorsement

Negotiating bank must have endorsed the Drafts, if they missed it, they have to accept and either send Fresh Endorsed drafts or send a message, treating as endorsement, to issuing bank.

 

However, if you have good relation with your seller, you will get payment. Even with this small discrepancy.

 

Imran Umer

IamImranUmer@gmail.com

Sun, 02/22/2009 - 06:47 — Gane

Bankers not accepting

but our bankers not accepting for to send drafts to opening bank because the documents were negotiated by them and so the draft is financial instrument so they are holded. our bankers asking payment to opening bank as per their covering schedule instructions.

please advice it can possible?

Thanks

Gane / Dubai

Sun, 02/22/2009 - 07:28 — LC Specialist

Bankers not accepting

who is drawee Gane, If the drawee is issuing bank the u have to send draft to issuing bank

Mon, 02/23/2009 - 01:50 — Gane

Drawee is Issuing Bank

yes sir, drawee is issuing bank. thanks, i will send you msg after discussed with our bankers.

Regards

Gane / Dubai

Sat, 02/21/2009 - 02:41 — Gane

DRAFTS NOT BE ENDORSED

and this is my question "THE OPENING BANK HOW CAN BE RELEASE THE PAYMENT WITH OUT DRAFTS?"

Please advice me.

Thanks & Regards

Gane / Dubai

Sun, 02/22/2009 - 12:28 — Frammi

In general, drafts are not that vital for payment, but ....

Dear Gane,

under the credit you have an independent payment obligation not necessarily to be accompanied by drafts. Please note that drafts are not comprised by "shipping documents". What should the issuing bank do with all those drafts, any how? Using them as a wallpaper?

In order that drafts need to be presented at all, the credit explicitly has to ask for them. No draft demanded - no draft to be presented.

As LC Specialist already wrote, drafts - if demanded - usually have to be presented to the drawee of that draft. By the nature of drafts they have to be presented to them for acceptance and payment.

So, if your bank is not drawees bank, their reasoning is incorrect. Irrespective of their purchasing that draft, it still needs to be accepted and paid, which is to be done by drawees bank and not by negotiating bank.

If they were drawees bank, they were right.

   -Each long journey starts with a small step-

Best regards

Frammi