Name: mehdik

Dear expert(s)

There is an LC with the following details:

Amount:  EUR 300000

Payment term (availability): By Negotiation with any bank

Partial payment: Allowed

The Beneficiary come to you as a bank and ask you to negotiate 1 set of documents.

Now the question is: How could you be assured of the balance of the LC?

On the hand I mean on which basis you could determine the utilized amount of LC? Where is the utilized amount of the LC or an LC with the same conditions recorded?

Your prompt reply would be highly appreciated.

Regards

The normal process is that the original LC is delivered (returned) together with
the documents. The negotiating bank will than write off the amount
negotiated - and return the LC to the beneficiary.

That being said - I may depend on the customer. It there is a strong
relationship between the negotiating bank and the beneficiary, it may be
handled without the writing off.

It should also be noted that this is in fact becoming increasingly
difficult since LC are being advised electronically - i.e. the concept
of the "original LC" becomes difficult.

I hope this helps you.

Best regards
Kim