Trade Finance Expertise

Issuing Bank (basically applicant/mporter’s bank) is the bank who opens Letter of credit  on behalf of applicant (importer/buyer) and takes responsibility to make the payment upon receipt of complied documents from beneficiary (exporter/seller) or on behalf of the beneficiary by their bank, an issuing bank may open letter of credit for themselves on their own behalf as well. Article 7 of UCPDC 600:   a. Provided that the stipulated documents are presented to the nominated bank or to the issuing bank and that they constitute a complying presentation, the issuing bank must honour if the credit is available by: An issuing bank issues an undertaking in form of letter of credit to honour the complied presentation, they must have to honour as per availability term given in field 41a of letter of credit, point to remember here that beneficiary has always an option to bypass nominated bank and present documents directly to issuing bank as nominated bank concept is to make beneficiary life easi

a. A credit must state the bank with which it is available or whether it is available with any bank. A credit available with a nominated bank is also available with the issuing bank. Field 41a Available With … By … is a field in MT 700 swift message type that is used to identify the bank with which the credit is available (the place for presentation) and indicates of how the credit is available. This is a mandatory field, which means that it must be stated in all of the letters of credit issued via MT 700 swift format. This is designed in a way to help the beneficiary to present the document at their convenience before or well within presentation period mostly in their country itself to avoid the late presentation and get paid early or at time. Last sentence says that credit is always available with issuing bank and nominated bank may be bypassed if beneficiary wants to present document directly to the issuing bank as the final liability of the credit is on opening bank only and the