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1)ABC Bank retired an import bill under their Letter Of

Credit.Subsequently importer approached them stating that the goods
were not inspected before shipment as called for under the relevant
contract and hence he is not liable to pay.Actually LC did not call for an
inspection certificate but in the description of goods in the LC a reference
was made to the contract number 0103 dated 21-7-2007

2)XYZ Bank retired a bill under their import LC.Subsequently importer

cleared the goods.He found that the goods were not those,which were
expected under LC and it was some waste material.He rushed to the bank
and requested to recredit his account,as he did not receive the ordered

3)LK Bank was approached by their importer client on 2-8-2007 stating

that his supplier has not received the LC opened by the bank on 2-7-
2007.LK Bank immediately contacted the advising bank, which informed
that the LC was remained to be advised and now they are advising the
same.Now,the beneficiary is not ready to accept the LC unless the amount
is increased by USD 1000.Importer complained that the opening bank is
responsible for the delay and loss.

4)Documents for USD 1,50,000 were submitted to PRG Bank by their

exporter client for negotiation on 10-11-2007 under LC which was
accompanied by an amendment –I)Increasing the value from USD 1,20,000
to USD 1,50,000,II)Extending the validity from 31-10-2007 to 30-11-2007
and III)Calling for an inspection certificate.The set of documents did not
include inspection certificate and hence the negotiating bank stated that
it is a discrepancy and documents cannot be negotiated.The exporter
explained that the inspection certificate was called under amendment and
not under original irrevocable LC and he was under no obligation to accept
the amendment.Moreover ,he had not earlier given any written
acceptance for the amendment.

5)LMN Bank was requested by their importer client to open an import

LC.The opening of LC was sanctioned by appropriate authority subject to
the condition to deposit 20% margin.As the importer required some time
to comply with this condition he requested the bank that though they
cannot open the LC until margin is deposited the bank should send a pre-
advice of LC by tele-transmission communicating important and brief
details of LC.
6)XYZ Bank received documents under their import LC on 1-11-2007.They
observed some discrepancies in the documents.They contacted the opener
informing the discrepancies.It was then decided to refuse the
documents.Hence on 15-11-2007 the opening bank sent a letter by
registered airmail to the negotiating bank stating that the documents
being discrepant are rejected and negotiating bank should recredit the bill
amount to their account.

7)The banks in the city were closed for four consecutive days from 8-10-
2007 to 11-10-2007 due to riots.On 12-10-2007 an exporter client
approached the bank with a request to negotiate export documents under
LC,which was valid up to 10-10-2007.The negotiating bank refused to
negotiate stating that the LC was expired.But the exporter argued that he
was ready with the set of documents on 9-10-2007 and since the bank was
closed he could not submit the documents on 10-10-2007.

8) A set of documents was submitted for negotiation on 3-11-2007.It

included Bill of Lading dated 20-10-2007.The date of LC was 22-10-2007.

9)A LC for USD 2,00,000 called for an insurance policy (among other
documents) covering all the risks of loss and damage.A set of documents
was submitted for negotiation which included an insurance policy for USD
2,00,000 dated 29-9-2007.The date of shipment was 27-9-2007.The policy
covered Institute Cargo Clauses (A).

10)Documents for USD 2,10,000 were submitted for negotiation to UHN

Bank.The face value of LC was USD 2,00,000.The negotiating bank refused
to negotiate in view of following discrepancies;

a)LC overdrawn.

b)The description of the goods in LC was “Vacuum Flasks ” as per

proforma invoice number MF/105/2007 dated 1-8-2007. In invoice it was
given as “Vacuum Flasks” as per proforma invoice number NF/105/2007
dated 1-8-2007.

11)A letter of credit was opened for USD 10,00,000 for 500 tons of
goods.100 tons were to be shipped each month from July 2007 to
November 2007 and the bills for USD 2,00,000 were to be drawn for each
month’s shipment.The bills for first two months were duly retired.There
was no shipment and bill in the month of September 2007.In the month of
October 2007,a bill for USD 2,00,000 was received by the opening
bank,covering 100 tons of goods. The opening bank refused to pay.

12)A set of documents included two separate Bills of Lading having

different dates indicating shipment from Mumbai India to Singapore and
Chennai India to Singapore on the ship “Jala Mayur”.The negotiating bank
refused to negotiate stating that partial shipment was effected which was
not allowed as per LC terms.

13)Export documents for USD 50,000 were submitted for negotiation on

16th August 2007 to ABC Bank Mumbai.It was noticed that the LC was valid
for negotiation up to 15th August 2007 only.The negotiating bank refused
to negotiate saying that the documents have been presented after expiry
of LC.

14)A LC stipulated last date for shipment and negotiation as 31-8-2007

and 15-9-2007 respectively.The set of documents received by the LC
opening bank indicated that the documents were negotiated on 10-9-2007
and those included Bill of Lading dated 2nd July 2007 covering shipment
from Bangkok to Mumbai India.

15)A Bill of Lading indicated that goods were received for shipment on 14-
9-2007.Last date for shipment was 15-9-2007.Documents were refused for

16)XYZ Bank refused a reimbursement claim lodged by ABC Bank stating

that the same was lodged after the date of expiry of LC and it was not
accompanied by certificate of compliance with terms and conditions of
LC.This resulted into delay in getting payment and negotiating bank
claimed interest from opening bank.

17)A LC stipulated submission of Bill of Lading among other

documents.The documents presented under the LC included a B/L
indicating that

I)It is charter party B/L.

II)Out of 500 drums shipped,50 drums were found leaking.

18)X Bank received bill under their import LC.On the covering schedule ti
was indicated by the negotiating bank that they had negotiated the bill
under reserve due to some discrepancies.The opening bank therefore
treated the bill as a bill on collection basis and presented it to the
importer,who communicated rejection after three weeks.Negotiating bank
insisted for payment by opening bank only.

19)A LC stipulated “Goods should be inspected before shipment”.Opening

bank refused payment pointing out absence of inspection
certificate.Negotiating bank communicated that such certificate is given
by the beneficiary on invoice.
20)A LC was opened for USD 1,00,000 approximately.A Bill was submitted
for USD 1,08,000.The quantity was 950 Kgs as against 1000 Kgs stipulated
in the credit.

21)An exporter submitted bill for negotiation and requested the bank that
Rupee value should be given to him only after getting the reimbursement
claim settled, which should be lodged immediately.He does not want to
pay any interest.

22)A transmissible LC for USD 5,00,000 was transferred by ABC in favor of

XYZ for USD 4,50,000.The bill of XYZ was negotiated but the negotiating
bank could not send documents to LC opening bank as ABC did not submit
his invoices for USD 5,00,000 for replacement.

23)A B/L indicated that transhipment will take place and goods may be
loaded on deck.LC was silent about transhipment and deck
shipment.Documents were refused.

24)Documents for USD 50,000 were presented to XYZ Bank for

negotiation.The bank refused negotiation pointing out following

I)Pre-shipment inspection certificate is dated subsequent to shipment


II)Draft does not bear a date.

III)Two copies of combined packing and weight list are submitted when
LC calls for a packing list and a weight list.

25)YYY Bank refused documents under their import LC observing following


a)LC stipulated that B/L to be drawn to the order of opening bank.Actually

bill indicates consigned to opening bank.

b)LC calls for “ocean” B/L.This word does not appear on B/L.

c)LC prohibits documents showing Pakistan as exporting country.Goods

manufactured in Afghanistan by beneficiary in that country are shipped
from Karachi.

26)One LC stipulated among other conditions that shipment should be

effected immediately and insurance cover should be taken from a first
class and well known insurance company.LC was advised on 1-11-
2007.Shipment was made on 10-11-2007.Documents including B/L and
insurance policy were submitted.The negotiating bank remarked that both
the above conditions remained uncomplied.
27)One LC was available with TSR Bank by negotiation.The LC was advised
by the same bank.However when the export documents were presented
that bank refused to negotiate.The exporter opined that as LC was
advised by them they were aware of this provision and hence they should
negotiate.However the bank only examined the documents,got few
discrepancies rectified and forwarded to the opening bank.The exporter
insisted that as they have examined and forwarded the document they
must negotiate.The said bank did not negotiate.

28)A set of documents under a LC included two separate B/L both dated 1-
10-2007 indicating shipment on ship “Jala Varsha” and “Jala Raj”.The
destination for both was London.Negotiating bank refused to negotiate
stating that this is partial shipment.LC was silent about partial shipment.

29)A transferable LC for USD 2,00,000 was transferred in favor of X for

USD 85,000 and in favor of Y for USD 85,000.Subsequently an amendment
calling for inspection certificate was received.X accepted the
amendment.Amendment was not acceptable to Y.He decided to transfer
his portion to Z.This was not allowed by transferring bank.Hence he
decided to retransfer it back to original beneficiary.

30)MN Bank negotiated documents under LC opened by RS Bank.They

forwarded all documents to the opening bank in one lot though the
instruction in the LC was to forward the documents in two lots.Documents
were lost in transit.Negotiating bank insisted for payment by opening
bank stating that loss in transit is not their fault.Opening bank refused
the payment.What would be the position if negotiating bank had strictly
complied with the instruction about despatch of documents.

31)One LC stipulated that shipment should be effected between 1-8-2007

and 10-8-2007 and Bill of Exchange should be drawn payable on 30th day
from shipment date.The shipment was made on 1-8-2007 and 30 days
period to ascertain the due date was also counted from that date.Is this

32)A LC stipulated that stale documents are acceptable.The LC was valid

up to 30-11-2007.A set of documents was presented on 1-12-2007 which
included B/L dated 1-11-2007.

33)A Negotiating bank pointed out following discrepancies.Are they


I)The name of opener is mentioned as Vijay Intl. Ltd. instead of Vijay

International Limited.

II)Corrections made in the invoice are not authenticated.

III)B/L indicates that packaging does not seem to be sufficient for sea

IV)LC calls for “Clean on Board B/L”.On actual B/L clean word does not

V)Description of goods in B/L and insurance policy does not correspond

with that given in the LC

34)I Bank sent a collection document to L Bank where the goods were
consigned directly to the address of L Bank with instructions to deliver
against payment of the bill.L Bank refused to take delivery of goods and
act as per instructions.However subsequently they decided to clear the
goods which were stored and insured until payment was received.IN the
process they incurred expenses on account of
demurrage,clearance,storage and insurance.The drawee did not pay these
charges.So,L Bank deducted these charges from proceeds.I Bank took
objection for this.

35)P Bank sent documents for collection to Q Bank.The documents were to

be delivered against payment.The bank was instructed to protest in case
of dishonour.The drawee did not honour the bill.Q Bank failed to comply
with instruction to protest.The drawer claimed damages from P Bank.

36)ABC Bank sent a bill for USD 50,000 to XYZ Bank for collection.The
documents included a Bill of Exchange payable 45th day from shipment.The
documents were to be delivered to the drawee against payment only.

37)TSR Bank sent a bill for collection to EFG Bank.The proceeds were
collected and remitted.Subsequently the drawee complained to the
collecting bank that the documents did not include test report at all and
inspection certificate was only one instead of two as required.It was
observed that in the “Collection Instruction” there was no mention about
test report and the number against inspection certificate was shown as
2.The remitting bank asserted that 2 originals of each of test report and
inspection certificate were sent along with other documents.

38)A set of collection documents included two different Bills of Lading

covering equal quantity of same material.The documents were to be
delivered against payment of USD 1,00,000.The drawee requested the
collecting bank to deliver one B/L against partial payment of USD
50,000.The collecting bank acted accordingly.
39)A collection instruction contained following instructions among others.

I)Interest to be collected from the drawee at 10% per annum for 20 days.

II)Collection charges are for the account of drawee.

III)Interest may not be waived.

The Drawee refused to pay interest and charges.The collecting bank

delivered documents against payment of bill amount only.

40)On 1-6-2007 GHI Bank received a bill for collection from SMT Bank.The
drawee refused to pay.GHI Bank immediately informed refusal to the
remitting bank on 10-6-2007 and sought their instructions.On 20-6-2002
GHI Bank returned the documents to SMT Bank as their were no
instructions.On 21-6-2007 they received a message from SMT Bank to
deliver documents to another drawee against payment.The documents
were lost in transit and SMT Bank did not receive the same.