Page 196 - A Banker Down the Rabbit Hole

(LC) otherwise they would not be able to honour the payment for the
documents with any major or even minor discrepancy as per their legal
right.

We checked up the terms of the related LC. We found that part shipment
was allowed. The Charter Party Bill of Lading (shipment by exclusive ship
only for the goods ordered) was allowed. The terms of LC are always
independent of any terms of the contract between the buyer (The
Applicant of LC) and seller (beneficiary of LC). We had not received
documents to check and could not know and point out any other
discrepancies. We had not received any telex message from negotiating
bank advising that the documents were in order and that the payment
should be made. So, we did not find any reason to stop T.T
reimbursement of documents under LC if the negotiating bank sent
message to reimburse confirming the documents were not discrepant.
We, all the four expat Managers, put heads together. There was no
justification for request of the customer. But then, we couldn't ignore the
largest customer of the branch with Hong Kong Dollar 100 million credit
lines who had not given us any opportunity to complain in past several
years.

We discussed our liability in case we don't pay immediately on
negotiation of documents by the negotiating bank and sending us a telex
for TT reimbursement and if we pay only when documents are found non-
discrepant. There could be gap of several days and we may have to pay
interest on this amount to the negotiating bank. There will be no liability
at all in case the documents are found discrepant. We asked the Chief
Financial officer (C.F.O) to bear any such interest cost to which he readily
agreed. He also assured us that in case of any serious implication for us,
the company would stand by us. He felt that there was something wrong
as per their information from their representatives in India and they did
not want to have any problem with their buyer in Singapore where
shipment was headed to, more particularly when the value of the
transaction was so large.

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