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A question of banking practices..

rqHello all, below is a question from one of the readers.. Since I am not an expert on banking practices, I am throwing this question out to all of you to answer Geoff’s question below..

Hope there is some banker that deals in International Trade that can throw some light on this..

I am sure that all the banks have certain safeguards to cover themselves against such risks..

If you have sent correct documents to your own UK bank as per the LC from the customers Bank Indonesian.

The LC is Irrevocable, At sight , was confirmed by both banks & the end customer, the LC has a date of expiry 27-03-13, my UK bank has a line of credit with the customers Indonesian bank.

What happens if the Indonesia bank has not paid my bank before the expiry date of the LC

I have already been paid by my bank for the goods


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Hariesh Manaadiar
Hariesh Manaadiarhttps://www.shippingandfreightresource.com
I am Hariesh Manaadiar, the Founder of Shipping and Freight Resource.. I have been in the dynamic shipping and freight industry for over three decades and have worked in several sectors.. I share my experiences and knowledge of the industry through this blog for those looking for help in the industry.. Stay subscribed for more free useful content about shipping, freight, maritime, logistics, supply chain and trade..


  1. Hi,
    If your bank has confirmed L/C and your documentation has been found correct, there wont be any problem for you. You must get the l/c amount without any problem

  2. Till such time you have submitted the documents properly no need to worry, any problem with the bankers they will sort out by themselves.

  3. Banks have confirmed so you have nothing to worry
    You have been paid by your bank
    Your Bank has checked all details before your payment
    if there is a problem both Banks will talk to each other and settle
    Maximum liability is extra interest


  4. Your first negotiating bank have to forward the documents thru the confirming
    bank in indonesia instead of forwarding direct to the opening bank in U.K.
    Please read the instructions in the L/C. regarding this point.

  5. It seems the L/C was confirmed by Indonesian bank on behalf of their U.K. L/C.
    opening bank. If the documents were in order then the confirming bank in Indonesia has to make the payment to your first negotiating bank unless their
    is some conditions in the L/C. not to do so. Your bank have to demand payment
    from the confirming bank in Indonesia if the documents complying all the terms
    and conditions in the L/C.


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