Module: | MODULE A: INTERNATIONAL BANKING
Q94: Consider the following statements regarding the extension of the expiry date and hours of presentation:
Statement 1: If the expiry date of a credit falls on a day when the receiving bank is closed for reasons other than a force majeure event, the expiry date is extended to the first following banking day.
Statement 2: If the expiry date is extended due to a standard bank closure like a weekend or public holiday, the latest date for shipment is also automatically extended by the same number of days.
Statement 3: A bank is obligated to accept a presentation of documents outside its standard operating hours if the expiry date falls on that specific calendar day.
Statement 2: If the expiry date is extended due to a standard bank closure like a weekend or public holiday, the latest date for shipment is also automatically extended by the same number of days.
Statement 3: A bank is obligated to accept a presentation of documents outside its standard operating hours if the expiry date falls on that specific calendar day.
✅ Correct Answer: A
The correct option is A. Only 1 is correct.
Concept Definition: The expiry date is the absolute final date by which the beneficiary must present the required documents to the nominated bank or the issuing bank to claim their payment.
The hours of presentation dictate when the physical bank doors are open to receive these documents.
Structural Breakdown: The banking rules clearly distinguish between predictable closures, such as weekends and scheduled public holidays, and unpredictable closures, such as natural disasters or force majeure events.
Historical/Related Context: Article 29 provides a grace period for predictable closures to ensure the beneficiary is not unfairly penalized by the calendar.
However, it strictly separates the administrative act of presenting documents from the physical act of shipping the goods.
Causal Reasoning: Statement 1 is correct.
If the bank is closed for a weekend or holiday, the expiry date rolls over to the next working day.
Statement 2 is incorrect.
Article 29 explicitly states that while the presentation period is extended, the latest date for shipment is never extended due to a bank closure.
The seller must still put the goods on the ship on time.
Statement 3 is incorrect.
A bank is under no obligation to accept presentations outside its normal banking hours.
If the beneficiary arrives after the bank has closed its doors for the day, the presentation is legally late.
Concept Definition: The expiry date is the absolute final date by which the beneficiary must present the required documents to the nominated bank or the issuing bank to claim their payment.
The hours of presentation dictate when the physical bank doors are open to receive these documents.
Structural Breakdown: The banking rules clearly distinguish between predictable closures, such as weekends and scheduled public holidays, and unpredictable closures, such as natural disasters or force majeure events.
Historical/Related Context: Article 29 provides a grace period for predictable closures to ensure the beneficiary is not unfairly penalized by the calendar.
However, it strictly separates the administrative act of presenting documents from the physical act of shipping the goods.
Causal Reasoning: Statement 1 is correct.
If the bank is closed for a weekend or holiday, the expiry date rolls over to the next working day.
Statement 2 is incorrect.
Article 29 explicitly states that while the presentation period is extended, the latest date for shipment is never extended due to a bank closure.
The seller must still put the goods on the ship on time.
Statement 3 is incorrect.
A bank is under no obligation to accept presentations outside its normal banking hours.
If the beneficiary arrives after the bank has closed its doors for the day, the presentation is legally late.