Financeability lab
Do not ask only: “Can this LC be monetised?”
Ask three better questions: Is it genuine? Can it be drawn? Will a financier accept the risk?
1Genuine?
Was the LC properly received and authenticated through the bank?
2Drawable?
Can the beneficiary make a complying presentation?
3Financeable?
Will a bank or financier accept the issuer, tenor, country, trade and other risks?
Teaching result
Never forgetGenuine ≠ drawable ≠ financeable.