1) What does UCPDC say regarding terms and conditions of Credit Contract and

Sales/Purchase Contract?
As per Article 4, UCPDC-600:
i)
ii)
iii)

A credit by its nature is a separate transaction from the sale or other contract.
Banks are in no way concerned with or bound by such contract, even there is any
reference to it in the credit.
The undertaking of a bank to honor, to negotiate or to fulfill any other obligation
under the credit is not subject to claims or defenses by the applicant resulting from its
relationships with the issuing bank or the beneficiary.

2) Write down the responsibility of an Advising Bank while advising an L/C to beneficiary?
As per Article 9, UCPDC-600:
i)
ii)
iii)

An advising bank may advise the credit and any amendment without any undertaking
to honor or negotiate.
An advising bank may utilize the services of another bank (second advising bank)
to advise the credit and any amendment to the beneficiary.
An advising bank or second advising bank to advise a credit must use the same bank
to advise any amendment thereto.

3) Define confirmed L/C?

As per Article 8, UCPDC-600:
A confirmed L/C is a definite undertaking by the confirming bank to reimburse claimed amount
by nominated bank or claiming bank.
4) What is the usual currency, amount and date of an insurance document?
As per Article 28, UCPDC-600:
i)

The usual currency of an insurance document must be the same currency as stated in
the credit.

ii)

If there is no indication in the credit of the insurance coverage required, the amount of
insurance coverage must be at least 110% of the CIF or CIP value of the goods. When
the CIF or CIP value cannot be determined from the documents, the amount of
insurance coverage must be calculated on the basis of the amount for which honor or
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negotiation is requested or the gross value of the goods as shown on the invoice,
whichever is greater.
iii)

The date of the insurance document must be no later than the date of shipment, unless
it appears from the insurance document that the cover is effective from a date not later
than the date of shipment.

5) What does a clean B/L mean?

As per Article 27, UCPDC-600:
A clean B/L is one bearing no clause or notation expressly declaring a defective condition of the
goods or their packaging.
6) Can a second advising bank be appointed for advising purpose? What is the
responsibility of second advising bank?
As per Article 9, UCPDC-600:
Yes, a second advising bank can be appointed for advising purpose.
The responsibility of a second advising bank is to satisfy itself as to the apparent authenticity and
the terms and conditions of the credit, the amendment or the advice.
7) The beneficiary seeks confirmation of an L/C issued by BASIC Bank (Mirpur Branch).
It is subsequently confirmed by a BASIC Bank branch located at London. Is it as per
UCPDC-600?
As per Article 3, UCPDC-600:
Yes. In UCPDC-600, Branches of a Bank in different countries are considered to be separate
Banks. So BASIC Bank branch located at London can add its confirmation to the credit.
8) A transferrable credit is generally transferred on the basis of the terms of original L/C.
But there are some permissible deviations in regard to transferring an L/C. What are those
deviations?
As per Article 38(g), UCPDC-600:
The permissible deviations in regard to transferring an L/C are the amount, Unit Price, Expiry
date, the period for presentation and the latest shipment date or given period of shipment of the
credit any or all of which may be reduced or curtailed.
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9) Write down briefly the procedure of refusing to honor (or negotiate) the documents on
the part of an issuing bank?
As per Article 16, UCPDC-600:
At the time of refusing to honor (or negotiate) the documents on the part of an issuing bank, it
must give a single notice to the presenter stating the following things:
i) That the bank is refusing to honor or negotiate; and
ii) Each discrepancy in respect of which the bank refuses to honor or negotiate; and
iii) The bank is holding the documents pending further instructions from the presenter or that
the issuing bank is holding the documents until it receives a waiver from the applicant and
agrees to accept it, or receives further instructions from the presenter prior to agreeing to
accept a waiver; or That the bank is returning the documents; or That the bank is acting in
accordance with instructions previously received from the presenter.
10) What is meaning of other documents in accordance with UCPDC?
As per Article 16, UCPDC-600:
In accordance with UCPDC-600 other documents mean all the documents of the Documentary
Credit other than the transport document, insurance document and commercial documents such
as bill of exchange, certificate of origin etc.
11) What specific requirement are supposed to be observed by issuing bank in regard to
other documents, while opening an L/C by issuing bank? What is the consequence if, it is
not followed?
As per Article 14, UCPDC-600:
In regard to other documents an issuing bank is to observe If a credit requires presentation of a
document other than a transport document, insurance document or commercial invoice, the credit
has to say what the data contents are and who the issuers are and a document presented but not
required by the credit will be disregarded and may be returned to the presenter.

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12) How many terms of payment are there in accordance with UCPDC-600? Name them.
As per Article 6, UCPDC-600:
There are three terms of payment are there in accordance with UCPDC-600. These arei)
ii)
iii)

Sight payment.
Deferred payment.
Acceptance or negotiation.

13) Why a nominated bank is not required to tender compliance certificate to a

reimbursing bank?
As per Article 13(b), UCPDC-600:
A reimbursing Bank in no way is responsible to check the documents presented by the nominated
bank/presenter whether the documents are complying or not. Rather it is bound to pay the
claimed amount by the claiming bank being directed by the issuing Bank/confirming Bank due to
its earlier nomination as the reimbursing Bank. That is why a nominated bank is not required to
tender compliance certificate to a reimbursing bank.
14) How many (minimum) parties are required to give consent, while amending a
confirmed L/C?
As per Article 10 (b), UCPDC-600:
There are three parties required while amending a confirmed L/C. They arei)
ii)
iii)

Issuing Bank.
Confirming Bank.
The Beneficiary.

15) What is the meaning of Blank-back / Short form B/L?

As per Article 20 (v), UCPDC-600:
In a Blank-back / Short form B/L the terms and conditions of carriage on the reverse (back) of
the Bill of Lading are omitted, instead they are listed on a document other than the Bill of Lading
or refer another source for the terms and conditions of carriage.

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16) States the problems of charter party B /L as compared to Liner party B/L?
As per Article 22, UCPDC-600:
The comparison between Charter party B/L & Liner party B/L:
Sl
.
1.
2.
3.
4.
5.

Charter party B /L

Liner party B/L

It has no specific route.

It has no berth place.
More risk is here.
After starting for the destination it is almost
impossible to locate.
No specific time to reach at the destination.

It has a specific route.

It has berth place.
Less risk is here.
After starting for the destination its location is
traceable.
No specific time to reach at the destination.

17) Is a letter of credit always irrevocable? Define an L/C?

As per Article 3, UCPDC-600:
Yes, a letter of credit is always irrevocable even if there is no indication to that effect.
As per Article 2, UCPDC-600:
Letter of Credit is a definite undertaking by a Bank in favor of beneficiary on behalf of an
applicant to pay a certain amount of money upon presentation of complying documents.
18) What is the maximum time period within which a nominated bank or a issuing bank
will have to examine documents?
As per Article 14(b), UCPDC-600:
A nominated bank or an issuing bank each will have a maximum of five banking days following
the day of presentation to examine documents.
19) The L/C prohibits transhipment. But B/L bears the notation transhipped as goods
are transported by a container. Will you accept the documents? Give reasons?
As per Article 20(c) (ii), UCPDC-600:
Yes, we will accept the documents. Even though transhipment is prohibited by the credit, Bill of
Lading bearing the notation transhipped is acceptable as goods are transported by a container.

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20) Why the terms such as Shippers Load and Count, Said to Contain, As declared
by shipper, etc. are not considered as to make a B/L claused / Not clean?
As per Article 26, UCPDC-600:
Shippers load and count, Said to contain, As declared by shipper are terms used in Bill of
Lading, when shippers or his agent weighs the goods at his place, labels and marks and moves
to custom station for export. In such a case, the carrier does not inspect the goods and can not be
held responsible either directly or indirectly for damage resulting from improper loading,
stowage or mixing of articles in the container, or any discrepancy in count or concealed damage
to articles. The shippers shall furnish carrier with a list of contents showing description of goods
and gross weight and cubic measurements of the contents of the container. Hence the carrier is
not in a position to declare the condition of goods or their packing notifying whether they are
Clean or Not Clean on Bill of Lading.
21) A full set of documents complying with L/C terms negotiated by you is rejected by the
opener on the plea that goods are defective? Can he do it? Give reasons.
As per Article 5, 7(c) and 34, UCPDC-600:
A full set of documents complying with the Letter of Credit terms and negotiated by the
nominated bank, can never be rejected by the opener on the following grounds:
i) As per article 5, banks deal with documents and not with goods, services or performance
to which the documents may relate,
ii) As per article 7 (C), an issuing bank undertakes to reimburse a nominated bank that has
honored or negotiated a complying presentation and forwarded the documents to the
issuing bank and
iii) As per article 34, a bank assumes no liability or responsibility for the form, sufficiency,
accuracy, genuineness, falsification or legal effect of any document, or for the general or
particular conditions stipulated in a document or superimposed thereon; nor does it
assume any liability or responsibility for the description, quantity, weight, quality,
condition, packing, delivery, value or existence of the goods, services or other
performance represented by any document, or for the good faith or acts or omissions,
solvency, performance or standing of the consignor, the carrier, the forwarder, the
consignee or the insurer of the goods or any other person.

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22) What constitute standards for examination of documents by issuing or nominated

bank?
As per Article 14, UCPDC-600:
Standards for examination of documents by issuing bank or nominated bank consist of
following:
i) A nominated bank acting on its nomination, a confirming bank, if any, and the issuing
bank must examine a presentation to determine, on the basis of the documents alone,
whether or not the documents appear on their face to constitute a complying presentation.
ii) A nominated bank acting on its nomination, a confirming bank, if any, and the issuing
bank shall each have a maximum of five banking days following the day of presentation
to determine complying presentation.
iii) If a credit requires presentation of a document other than a transport document, insurance
document or commercial invoice, without stipulating by whom the document is to be
issued and/or what will be the data content, banks will accept the document as presented.

23) What appropriate notations are to given in the body of an L/C at the time of opening it,
for getting protection under UCPDC?
As per Article 1, UCPDC-600:
Any Documentary Credit (commercial/ standby) when the text of the credit expressly indicates
that it is subject to UCP 600 rules.
Examples of express indication for getting protection under UCPDC:
(i)This credit is subject to UCPDC 600.
(ii)In SWIFT MT700 Field 40 E: UCP LATEST VERSION.
24) If the expiry date of an L/C falls on a holiday, then what appropriate notations are to be
given for submission of documents on the day following the holiday?
As per Article 29, UCPDC-600:
If the expiry date of Letter of Credit falls on a holiday, the presentation is to be made on the first
following banking day. In this connection a nominated bank must provide the issuing bank or
confirming bank with a statement on its covering schedule that the presentation was made within
the time limits extended in accordance with sub-article 29 (a), where it permits presentation of
documents on the following banking day if the expiry or last presentation day is a holiday.

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25) The L/C stipulates shipment latest by March 16. The B/L presented bears date May 17,
as 16th is a public holiday. Will you accept documents? Give reasons.
As per Article 29, UCPDC-600:
No, we will not accept the documents.
The Bill of Lading shows shipment date as on May 17, which should be within May 16 as per
credit. Though the 16 May was a public holiday, it should be treated as late shipment as per
article 29(C) where it is stated that the latest date for shipment will not be extended even though
the last date of shipment is a public holiday.
26) The L/C is silent regarding date of presentation of documents. What does it mean
regarding presentation of documents?
As per Article 14, UCPDC-600:
If the LC is silent regarding date of presentation of documents, documents must be submitted not
later than 21 calendar days after the date of shipment but not later than the expiry date of the
credit. So, the beneficiary must submit the document within 21 calendar days after the date of
shipment but not later than the expiry date of the credit.
27) Why must an L/C stipulates an expiry date? What constitutes expiry place?
As per Article 6, UCPDC-600:
A credit must state an expiry date for presentation. An expiry date stated for honor or negotiation
will be deemed to be an expiry date for presentation.
The place of the bank with which the credit is available is the place for presentation. The place
for presentation under a credit available with any bank is that of any bank. A place for
presentation other than that of the issuing bank is in addition to the place of the issuing bank.
28) Various L/Cs stipulate following things:
i) TD must be issued in the second half of February
ii) TD must be issued in the end of the January
iii) TD is to be dated after first March
iv) Latest date of shipment is on or about 5th September.
What do the above underlined words mean?
As per Article 3, UCPDC-600:
i) Second half of February means 16 February to end of the day of February
ii) End of the January means 21 January to 31 January
iii) After 1st March means from 2nd March
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iv) on or about" 5th September means 5 days of before 5th September and after 5 days
of 5th September i.e. 31 August to 10th September, Total =11 Days
29) Differentiate between Transferable L/C and Transferred L/C.
As per Article 38, UCPDC-600:
Transferable credit means a credit that specifically states it is transferable. A transferable
credit may be made available in whole or in part to another beneficiary (second
beneficiary) at the request of the beneficiary (first beneficiary). On the other hand,
Transferred credit means a credit that has been made available by the transferring bank to a
second beneficiary.

30) Which bank can act as transferring bank? Can an issuing bank be transferring bank?
As per Article 38, UCPDC-600:
A nominated Bank can act as a transferring Bank that is specially authorized by the issuing Bank
or available any Bank in the credit. Yes, an Issuing Bank may be a transferring bank.

31) Generally, how many times and to how many parties, a transferable L/C can be
transferred. Where will the second beneficiaries submit documents?
As per Article 38, UCPDC-600:
A transferable L/C can be transferred several times and to several parties by the first beneficiary.
The second beneficiary will submit documents to the first beneficiary.
32) What does Negotiation mean according to UCPDC-600?
As per Article 2, UCPDC-600:
Negotiation means the purchase by the nominated bank of drafts (drawn on a bank other than the
nominated bank) and/or documents under a complying presentation, by advancing or agreeing to
advance funds to the beneficiary on or before the banking day on which reimbursement is due to
the nominated bank.

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33. An issuing bank can honor only against complying presentation? What do the underline
words of the above sentence mean?
As per Article 2, UCPDC-600:
Honor means:a) To pay at sight if the credit is available by sight payments.
b) To incur a deferred payment undertaking and payment
c) to accept a bill of exchange (draft) drawn by the beneficiary and pay at maturity if the
credit is available by acceptance
Complying presentation: Complying presentation means a presentation that is in accordance
with the terms and conditions of the credit, the applicable provisions of these rules and
international standard banking practice.
34. What does Nominated Bank mean? Is it obligatory on the part of nominated bank to
comply issuing banks nomination?
As per Article 2, UCPDC-600:
Nominated bank means the bank with which the credit is available or any bank in the case of a
credit available with any bank.
Unless a nominated bank is the confirming bank, an authorization to honor or negotiate does not
impose any obligation on that nominated bank to honor or negotiate, except when expressly
agreed to by that nominated bank and so communicated to the beneficiary.
35. What is transshipment in general sense? What does transhipment mean in case ofi) Multimodal /combined transportation

ii) Airway transportation

iii) RRI transportation

As per Article 19, UCPDC-600:
Transshipment means unloading from one vessel and reloading to another vessel during the
carriage from the port of loading to the port of discharge stated in the credit.
Transshipment means in the case ofi)

Multimodal /combined transportation : As per UCP600 article 19 (b)

Multimodal /combined transportation/ transshipment means unloading from one
means of conveyance and reloading to another means of conveyance (whether or not
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ii)

iii)

in different modes of transport) during the carriage from the place of dispatch, taking
in charge or shipment to the place of final destination stated in the credit.
Airway transportation: As per UCP600 article 23(b) Airway transportation means
unloading from one aircraft and reloading to another aircraft during the carriage from
the airport of departure to the airport of destination stated in the credit.
RRI transportation: As per UCP600 article 24(d) RRI transportation means
unloading from one means of conveyance and reloading to another means of
conveyance, within the same mode of transport, during the carriage from the place of
shipment, dispatch or carriage to the place of destination stated in the credit.

36. How would you determine date of shipment in case of following TDsi) Multimodal/combined ii) Bill of lading iii) Airway bill iv) Courier receipt v) Postal
receipt
As per UCPDC-600: To determine the date of shipment in case of following TDs
i)

Multimodal /combined: As per UCP600 article 19(a)(ii) The date of issuance of the
transport document will be deemed to be the date of dispatch, taking in charge or
shipped on board, and the date of shipment. However, if the transport document
indicates, by stamp or notation, a date of dispatch, taking in charge or shipped on
board, this date will be deemed to be the date of shipment

ii)

Bill of lading: As per UCP600 article 20(a)(ii) The date of issuance of the bill of
lading will be deemed to be the date of shipment unless the bill of lading contains an
on board notation indicating the date of shipment, in which case the date stated in the
on board notation will be deemed to be the date of shipment.

iii)

Airway bill: As per UCP600 article 23(a)(iii) Indicate the date of issuance. This date
will be deemed to be the date of shipment unless the air transport document contains
a specific notation of the actual date of shipment, in which case the date stated in the
notation will be deemed to be the date of shipment.

Any other information appearing on the air transport document relative to the flight number and
date will not be considered in determining the date of shipment.
iv)

v)

Courier receipt: As per UCP600 article 25(a)(ii) Courier receipt appear to indicate
a date of pick-up or of receipt or wording to this effect. This date will be deemed to
be the date of shipment.
Postal receipt : As per UCP600 article 25c(ii) A post receipt or certificate of posting,
dated at the place from which the credit states the goods are to be shipped. This date
will be deemed to be the date of shipment.

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37. What would the currency of a commercial invoice? What sort of description of goods , a
commercial invoice will contain?
As per Article 18, UCPDC-600:
The currency of a commercial invoice must be made out in the same currency as the credit.
The description of the goods, services or performance in a commercial invoice must correspond
with that appearing in the credit.
38. Suppose, an LC has been opened for about $10,000. And the price of the goods is
approximately $10 per unit. But the presented documents show per unit price $11 and
total amount $ 11,000. Will you accept the documents? Give reasons of your answer.
As per Article 30, UCPDC-600:
Yes, we will accept the documents if words "about" or "approximately" used in connection with
the amount of the credit or the quantity or the unit price stated in the credit are to be construed as
allowing a tolerance not to exceed 10% more or 10% less than the amount, the quantity or the
unit price to which they refer.
39. What constitutes partshipment? If the goods are shipped from different ports(of
loading), but on the same vessel and same voyage, is it partshipment?
As per Article 31, UCPDC-600:
A presentation consisting of one or more sets of transport documents evidencing shipment on
more than one means of conveyance within the same mode of transport will be regarded as
covering a partial shipment, even if the means of conveyance leave on the same day for the same
destination.
It is not considered as partshipment as per Article 31.
40. Distinguish between presentation(of documents) and presenter (of documents).
As per Article 2, UCPDC-600:
Presentation means either the delivery of documents under a credit to the issuing bank or
nominated bank or the documents so delivered.
Presenter means a beneficiary, bank or other party that makes a presentation.

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