Page 195 - A Banker Down the Rabbit Hole

56. A sleepless night in Hong Kong

A freak request from the largest borrower of the branch
One of our customers had largest credit lines approved at our branch.
They had employed a Senior Manager of another Indian Bank as Chief
Financial Officer (C.F.O) who had stayed back after he was repatriated
by the bank in India. He also used to do the liaising with bank for any
issues that may crop up. The conduct of this customer account was quite
satisfactory and they had maintained very good relationship with bank.
Our ex-batch officers spoke very high of their dealings.

One day, their C.F.O came to meet me and informed that they were
expecting documents under Letter of Credit amounting to USD 600,000
for their import of iron ore from Mormugao Port, Goa in India shipped
directly to their buyer in Singapore. They had come to know that there
was some difficulty in documents as the shipper had part engaged the
chartered vessel to save freight which was against the understanding with
the shipper exporter and was also not as per terms of the contract
between them. He requested not to pay the amount of documents as
per T.T reimbursement clause in the Letter of Credit (LC) before checking
the documents thoroughly for discrepancies.

The tested tele transmission (TT ) reimbursement clause required us (the
LC issuing Bank) to pay the exporter's bank in New York within 48 hours
of receiving the negotiating bank's telex message that documents have
been received and there was no discrepancy in documents in terms of
the related Letter of Credit. He insisted that we should pay only on receipt
of documents and after thoroughly checking for discrepancies and finding
the documents in order as per terms and conditions of Letter of Credit

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