What is discrepancy in letter of credit?
In the context of letters of credit, discrepancies arises when documents presented under a letter of credit do not conform to the terms of the credit; generally an error, contradiction or omission related to the documents constitutes the discrepancy.
How do you avoid letter of credit LC discrepancies?
Preventing discrepancies
- Fax the buyer the terms of the letter of credit, which should.
- After the buyer completes the letter of credit application, which it.
- The exporter should make sure that the description of the.
- The exporter should request at least a 14-day period in which to.
What is discrepancy fee in LC?
Discrepancy fee occurs, only when the issuing bank determines that the presentation is not complying. Issuing banks try to justify discrepancy fee, based on their claim that discrepant documents increase handling costs of issuing banks. Many trade professionals find these claims unjustified.
What is discrepancy in bank name?
Discrepancy is defined as a difference or inconsistency. An example of discrepancy is a bank statement that has a different balance than your own records of the account. noun.
Can a letter of credit be issued after shipment?
In general LCs are issued either at “sight LCs” or “Usance LCs.” For the first payment is made “at sight” i.e. right after presentation of the documents. For the latter payment is made after a specified number of days (as determined by the LC) – e.g. “90 days after shipment.”
What is LC 30 days?
A letter of credit can be LC 90 days, LC 60 days, or more rarely, LC 30 days: The “LC” stands for “letter of credit. This simply means that the funds promised in the letter of credit are due in 90, 30 or 30 days, or the guaranteeing bank is on the hook for the money.
How long does a bank have to correct an error?
Most of the time, your bank will correct an error promptly. The bank has 10 days to correct an error involving an electronic funds transfer, but, according to the Office of the Comptroller of the Currency, there is no set time period for a bank to correct an error involving a written check.
How long does it take to issue letter of credit?
Letters of credit are typically provided within two business days, guaranteeing payment by the confirming Citibank branch. This benefit is especially valuable when a client is located in a potentially unstable economic environment.
What is the definition of a discrepancy in a letter of credit?
Definition: Discrepancy can be defined as an error or defect, according to the issuing bank, in the presented documents compared with the documentary credit, the UCP 600 rules or other documents that have been presented under the same letter of credit.
Is there a balance discrepancy in my bank account?
In the letter that you sent to me on [Date], the current balance is different from what my records tell me. I attached the letter that you sent me and I hired an accountant to find the discrepancy on the balance. I’m still waiting for the checks that were delivered to my accountant and we will start to review everything.
What is sample initial notice of balance discrepancy?
Sample Initial Notice of Balance Discrepancy. Sample 1: [Date] Dear [Name of Recipient], In the letter that you sent to me on [Date], the current balance is different from what my records tell me. I attached the letter that you sent me and I hired an accountant to find the discrepancy on the balance. I’m still waiting for the checks that were
What happens after the expiry of a letter of credit?
Documents presented after the letter of credit has expired. Normally banks should not accept any documents that have been presented after the expiry date of the credit. However, banks left the final decision to the applicants on this regard by evaluating the late presentation as a discrepancy. Documents required by the letters credit is missing.
