Chapter 17 - GENERAL - BANK TO BANK REIMBURSEMENTS

URR 725 governs the operation of Bank to Bank Reimbursements

·         Although only one bank (an issuing bank) is necessary for the operation of a documentary credit, in many cases an issuing bank will give Payment Authorization (Reimbursement) to an another bank to make settlement on its behalf. These banks are known as reimbursing banks.

·         The URR 725 under Documentary Credits shall apply to any bank-to-bank reimbursement. The issuing bank is responsible for indicating while issuing the documentary credit (LC) that reimbursement is subject to these rules.

·         UCP600, article 13 covers the basic arrangements for bank-to-bank reimbursements. URR725 provides additional clarification and more detailed rules to be followed in such circumstances.