Trade Finance Expertise

  Article-4 Credits v. Contracts   -a. A credit by its nature is a separate transaction from the sale or other contract on which it may be based.  Banks are in no way concerned with or bound by such contract, even if any reference whatsoever to it is  included in the credit. Consequently, the undertaking of a bank to honour, to negotiate or to fulfil any other  obligation under the credit is not subject to claims or defences by the applicant resulting from its  relationships with the issuing bank or the beneficiary. Explanation: Let’s first understand what are credit and contracts, letter of credit is one of the payment method in trade business, sales contracts is a written consent between importer and exporter when there is a trade going to take place, these contracts will include that, what, when and how will be done and both parties remain agree with those terms. That is one of the main reason we mostly look for a copy of sales contracts, purchase order or profroma invoice (will

Where applicable, words in the singular include the plural and in the plural include the singular. We can accept the document if given in singular in letter of credit and presented documents shown as plural or vice versa, however, that should not change the meaning of the word.   -A credit is irrevocable even if there is no indication to that effect. It says that even if we don’t mention in field 40A of letter of credit as “irrevocable” it will deemed to be irrevocable and can’t be cancelled or amended without the consent of all the parties of the letter of credit.   -A document may be signed by handwriting, facsimile signature, perforated signature, stamp, symbol or any o ther mechanical or electronic method of authentication. Let’s first understand what facsimile and perforated signature is- Facsimile:  a facsimile signature means the reproduction by engraving, imprinting, stamping, or other means of the manual signature, we can refer in below example: Perforated signature: sig