A Standby Letter of Credit (LC) is a type of financial guarantee provided by a bank to a beneficiary (usually a seller or a supplier) on behalf of a customer (usually a buyer or an importer). The LC serves as a promise by the bank to pay the beneficiary a certain amount of money if the customer fails to fulfill certain obligations, such as paying for goods or services, or complying with certain conditions.
An amendment to a standby LC is a change or modifications to the original terms and conditions of the LC. It can be issued by the bank at the request of the customer or the beneficiary, and can cover a wide range of issues, such as extending the expiration date of the LC, increasing the amount of the LC, or modifying the terms of payment.
When issuing an amendment to a standby LC, banks must follow the guidelines and regulations set forth by the Uniform Customs and Practice for Documentary Credits (UCP), which is a set of international rules that govern the issuance, amendment, and presentation of LCs.
One of the key requirements for issuing an amendment to a standby LC is that the bank must obtain the written consent of both the customer and the beneficiary before making any changes. This is to ensure that both parties are aware of and agree to the new terms and conditions of the LC.
The bank also needs to make sure that the amendment contains all the necessary information, such as the original LC number, the date of the amendment, the details of the changes made, and the signatures of the parties involved.
In RIVO, the bank user can issue an amendment to a standby LC by following these steps:
Log in to the RIVO system using your username and password.
Locate the standby LC searching by reference number also under status Amendment Approved, that you want to amend.
Make the necessary changes to the LC, such as extending the expiration date or increasing the amount.
Release and save the amendment.
By following these steps, the bank user can issue an amendment to a standby LC in RIVO, ensuring that all the necessary guidelines and regulations are met.
Note: The Amendment issued by bank shows status as Amendment -Amended.