On this article you can find the definition of a nominated bank, its roles and responsibilities in a typical letter of credit transaction.
Definition: According to current letter of credit rules, UCP 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.
Nominated bank has two main functions under a letter of credit transaction.
Firstly, a nominated bank is the presentation point of the documents. As a result, a beneficiary complete its presentation by submitting documents to the counter's of the nominated bank within the time frame indicated in the letter of credit.
Secondly, a nominated bank may act as a discounting bank by purchasing a time draft or documents that have been submitted by the beneficiary and found to be complying by the nominated bank.
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Nominated Bank |
After briefly defining what nominated bank is and explaining its functions, now we can look further into different aspects of nominated bank.