Documents received by issuing banks under DC are known as Bills Receivable (BR). These are checked by the issuing bank for discrepancies. If the bill is found to contain discrepancies then the negotiating bank must be advised without delay.

Settlement of Sight DC Bills

Sight bills are payable immediately on arrival, after the documents have been checked and are found to contain no discrepancies. The issuing bank is obliged to pay the bill immediately. Documents will be released to the importer after the bill is retired, either through debiting the importers account or through granting an import loan.

As the opener is not given the documents until he has settled the bill, he is unable to take delivery of his goods (unless he has taken a shipping guarantee). If he does not settle the bill, the opening bank will still have control over the goods and can sell them to get at least some of the money back to apply against the outstandings of the applicant.

Acceptance of Usance DC Bills

Under usance DC bills, once the documents have been checked and found to contain no discrepancies, the issuing bank is obliged to give an undertaking to pay the bill on the date specified on the DC.

Handling Discrepancies

If the BR contains discrepancies, the applicant should be advised what the discrepancies are and be requested to accept them. In the majority of cases, the discrepancies are accepted and the bill paid after a few days. Sometimes, however, the terms of the contract may be renegotiated.