• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.48
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• pp.3-23
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• 2010

In letter of credit arrangements, the issuing bank nominate a reimbursing bank which serves as a source of funds payment to the beneficiary. The reimbursing bank could be 3rd party bank or the issuing bank itself. In view of working capital requirements, most beneficiary want to get export proceeds in advance through nominated banks and therefore letter of credit usually permit the beneficiary to negotiate drafts, accompanied by required documents, to nominated bank. If the credit is available with the nominated bank, there must be a reimbursement instruction in the credit, because in this method of availability the issuing bank is obliged to reimburse the nominated bank if that bank acts on its nomination There are legal relationship among issuing bank, nominated bank and reimbursing bank with regard to reimbursement activities. Related rules are UCP and URR and UCC (in case of USA). Korean exporters and bankers do not appear to know well the role of reimbursement and usage. 3 cases (court case + ICC Opinion + bad practices) were employed to study the reimbursement mechanism and suggest better usages. The beneficiary is strongly recommended to know the benefit of reimbursement claim from independent reimbursing bank. The benefits include speed payment (thereby saving finance costs) and safe funds (in case of stop payment by the issuing bank right after the proceeds are reimbursed). And further the beneficiary banks (being nominated or claim banks) are also recommended to take advantage of the 3rd party reimbursement in view of the cases illustrated.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.12
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• pp.519-551
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• 1999

When an issuing bank issues a documentary credit, it must decide if the reimbursement will be a direct or simple or a bank-to-bank reimbursement. This decision is based on the bank that is nominated to pay, incur a deferred payment undertaking, accept drafts or negotiate. If an issuing bank decided bank-to-bank reimbursement, it must include the information in the credit instructing the nominated bank on how to obtain reimbursement. This instruction includes the name of the reimbursing bank, an indication that the reimbursement is subject to the Uniform Rules for Bank-to-Bank Reimbursements Under Documentary Credits ('URR'), ICC Publication 525 and any additional information that affects the nominated bank's ability to receive reimbursement. Until recently, reimbursements were the subject of outline regulation by Article 19 of the Uniform Customs and Practice for Documentary Credits ('UCP') and national law. Now, however, the International Chamber of Commerce has drafted URR, designed to emulate the harmonization of rules governing documentary credits achieved by the UCP. The URR are complementary to the UCP, which they are not intended to override or change. They became effective on July 1, 1996. The purpose of this study is to promote understanding on the Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits. In this paper, I studied the following subjects:(1) Bank-to-Bank Reimbursements tranaction under Documentary Credits, (2) Meaning of the URR's promulgation, (3) Analysis on the URR's Article. (1) General provisions and definitions, (2) Liabilities and responsibilities, (3) Form and notification of authorisations, amendments and claims, (4) Miscellaneous provisions.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.9
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• pp.377-388
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• 2020

The research identifies hypotheses evaluating the impact of board characteristics on the risk of the commercial bank as well as examining the determinants of bank risk in Vietnam over a 10-year period, starting from 2008. Also, in this research, the differences between the roles of women and men in decision-making are tested. Based on this decision, risks of the banks may arise. Ordinary least squares(OLS) regression, Random effect method, and Fixed effect method are used to estimate the factors that have an impact on bank risk for dataset of all commercial banks in Vietnam. The results found that equity-to-asset ratio, bank performance and the economic growth have an inverse relationship with bank risk, while the size of bank has a positive relationship with the bank risk. One of the highlights of this paper is a demonstration of the relationship between CEO's gender and bank risk. The test result shows that the bank led by a female faces a higher overall risk level and credit risk than a bank led by a male. Based on this result, the paper also makes recommendations to Government, the State Bank of Vietnam and the commercial banks for effective risk management.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.5
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• pp.649-656
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• 2021

This paper aims to examine the moderating role of bank competition on the effect of liquidity creation on bank capital. We measure bank competition using the Lerner index approach, liquidity creation using the Catfat approach, and bank capital using the capital to total asset ratio approach. This test also considers control variables from bank-specific factors such as Return on Assets, Loan to Deposit Ratio, and Non-Performance Loans as well as macroeconomic factors such as Gross Domestic Product, inflation, and Bank Indonesia interest rates. The sampling technique used was purposive sampling. The data sample obtained was 96 banks from a population of 114 banks in Indonesia which consistently operated during the period 2008-2018. Hypothesis testing uses panel data regression analysis techniques through the first model of the Hayes method. The results show that the negative effect of liquidity creation on bank capital depends on competition. We found that bank competition at any level (low, medium, high) negatively moderates (weakens) the effect of liquidity creation on bank capital in all banks. This finding is consistent with the view that banks may strengthen their capital in response to bank competition which may decrease the level of bank liquidity creation.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.47
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• pp.107-127
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• 2010

This work intends to study the obligations and liabilities of advising bank in UCP 600. An advising bank has two big obligations as follows : by advising the credit or amendment, the advising bank signifies that it has satisfied itself as to the apparent authenticity of the credit or amendment and that the advice accurately reflects the terms and conditions of the credit or amendment received. An advising bank may utilize the services of another bank("second advising bank") to advise the credit and any amendment to the beneficiary. If a bank is requested to advise a credit or amendment but elects not to do so, it must so inform, without delay, the bank from which the credit, amendment or advice has been received. An advising bank has some problems in connection with the delay of advice and the advice of forged letter of credit.

• The Journal of Industrial Distribution & Business
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• v.9 no.9
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• pp.15-23
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• 2018

Purpose - The purpose of this paper is to examine the determinants of non-bank depository institutions (non-bank financial corporations) lending to firms. The paper aims to contribute to the existing literature by providing empirical evidence from firm-level data and unveiling factors related to access to non-bank financial corporations by firms. Research design, data, and methodology - We used the data on borrowing by firms from CRETOP from years 2008 to 2011. Using the manufacturing industry, we examined what firm-level characteristics explained the increase in borrowing from non-bank financial corporations rather than the banks. Results - Analyzing the firm-level data from 2008 to 2011, we found that firms were more likely to borrow from non-bank financial insti­tutions as the size of the firm increases, implying that large firms have more access to non-bank financing than small and medium-sized firms. In addition, it also showed that small and medium-sized firms moved to non-bank financial corporations for loans. Conclusion - Non-bank depository institutions are not a sub­stitute for bank lending to firms. More specifically, they replace bank lending to firms mostly for large firms rather than small and medium-sized firms. Also, collateral and other firm-level characteristics do not matter in accounting for non-bank lending to firms.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.1
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• pp.841-850
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• 2021

This study aims to evaluate the relationship between bank capital, efficiency, and risk in Islamic banks. We use data from 129 Islamic banks in the world, retrieved from various data sources. We retrieved specific banking data from Moody's Analytics BankFocus and Thomson Reuters Eikon, while data at the country level was obtained from the World Bank website. This study uses various estimates both Pooled OLS (Ordinary Least Square) and Random Effect (RE). However, to overcome the issue of serial correlation which could cause bias in the results of the study, we used fixed-effect (FE) cluster estimates. The research results confirm the previous findings that bank capital positively affects bank stability (natural logarithm of Z-Score) and negatively affects credit risk (loan loss provision to total liabilities). The findings also show that efficiency has the same effect. The interaction test of bank capital and efficiency shows that efficiency encourages banks to reduce risk, including when bank capital is relatively lower. This finding is expected to have implications for the authorities to boost bank efficiency in addition to establishing several regulations related to capital. The efficiency implemented by the bank will encourage banks to act prudently so that the bank can maintain its performance through risk mitigation.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.16 no.8
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• pp.5267-5272
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• 2015

This paper analyzes the relationship between the industry bank loan concentration and its risk using the Korean bank loan data. We focused on the construction and real estate industry which are controversial on the non performing loans. We used the construction or leasing real estate industry bank loan ratio of the corporate bank loan as the bank loan concentration proxies. The bank risk are measured as the equity capital rate or the size of non performing loans. According to the results of this research, the preceding bank loan ration of the construction industry or the leasing real estate industry decreases the non performing loans and increases the equity capital rate. The bank loan concentration to the specific industry may not increase bank risk. The bank loan concentration may decrease the information asymmetry and improve the screening abilities the non performing loans. We suggest that the bank loan concentration on the construction or leasing real estate industry in the Korean economy may not directly connected to the bank risk.

• Journal of Navigation and Port Research
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• v.46 no.2
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• pp.82-91
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• 2022

When a ship moves in the proximity of the lateral bank, bank suction forces are generated due to bank effects. Thus, hydrodynamic forces can significantly impact the ship's maneuverability and navigation safety. In this study, model tests were performed to investigate the hydrodynamic forces exerted on a ship, especially suction forces caused by bank effects, using captive model and bank effect tests. A low-speed condition was selected in this study, because of the perilous situation as the ship moves close to the bank. The accuracy of the hydrodynamic forces exerted on the hull was verified, by comparing the results of the static drift test with the results obtained from other institutes at design speed. The straight simulation caused by bank effects was then implemented using estimated hydrodynamic coefficients.

• International Commerce and Information Review
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• v.14 no.4
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• pp.433-456
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• 2012

The confirming bank undertakes to make payment to the beneficiary, provided that a complying presentation is made and complies with its confirmation. In case L/C fraud is evident, though, the confirming bank as well as the issuing bank does not have the obligation to make payment. That is, the confirming bank does not take the risks involving documentary fraud. The confirming bank cannot exercise the right to recourse toward the beneficiary or the nominated bank when the issuing bank finds the discrepancies which the confirming bank has not noticed. This is because under UCP600, the issuing bank or the confirming bank cannot refuse to make payment with the cause of documentary discrepancy after 5 banking days following the presentation of documents. Even if the issuing bank accepts the discrepant documents following the confirming bank's request to do so, the confirming bank does not have the responsibility for the confirmation. When under Usance Negotiation Credit, the confirming bank acts as the nominated bank, the confirming bank should make payment in no time if the beneficiary presents complying documents. Therefore, unless the confirming bank intends to make immediate payment, they should consider using Deferred Payment or Acceptance L/C in Usance Credit. It is also safer for the beneficiary to have the reimbursing bank's undertaking to the reimbursement than just have confirmation of the credit because in the latter case they may not have full payment due to disputes regarding discrepancies of the documents even if they have confirmation of the credit.