lmportance of Article 13(b) of the UCPDC on Reasonable Time

Prior to 1993 revision of UCP, the ‘reasonable time’ allowed to the issuing  bank to verify the documents to judge whether they were in conformity with the  requirements of letter of credit was not clearly defined. The vagueness associated  with the term was cleared by Article 13(b) inserted in the 1993 revision.

As per this Article “the issuing bank, the confirming bank, if any, or a nominated bank acting on their behalf, shall have a reasonable time, not to exceed seven banking days following the day of receipt of documents, to examine the documents  and determine whether to take up or refuse the documents and inform the party from which it received the documents accordingly.”

Thus the maximum time available to bank for scrutiny of documents has been clearly stated as seven banking  days.

Further the new Article confers the right to have time and the right to reject the documents not only on the issuing bank but on the confirming bank and nominated bank as well.

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