Sight payment credits
Various security criteria
The applicable security criteria will differ depending on the form of the sight credit:
Unconfirmed sight payment credits. The issuing bank assumes the irrevocable obligation, on behalf of the buyer, to effect immediate payment (at sight) to the beneficiary (the exporter) subject to the presentation of the stipulated documents within a prescribed period of time and fulfilment of all the terms and conditions of the credit.
Confirmed sight payment credits. Here, the confirming bank as well as the issuing bank undertake to effect payment on presentation of the stipulated documents. The obligation of the confirming bank exists independently of that of the issuing bank. For this purpose, the exporter's bank requires a clear instruction from the issuing bank.
This is a classic contemporaneous transaction. In other words, the beneficiary does not give the buyer a period of grace for payment.
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