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Case Scenario:
M/s. Sunrise Electronics (India) has received an export order from M/s. TechWorld GmbH (Germany) for supply of semiconductor components worth USD 100,000.To secure payment, TechWorld GmbH requests its bank, HSBC, Frankfurt, to issue an Irrevocable Documentary Letter of Credit (LC) in favour of Sunrise Electronics.
HSBC issues the LC and sends it to HDFC Bank, Mumbai, to advise the same to the beneficiary (Sunrise Electronics). The LC states that payment will be made against shipment documents presented within 30 days of LC issuance, provided all terms and conditions are fulfilled.
To ensure additional payment security, Sunrise Electronics asks HDFC Bank to add its confirmation to the LC. HDFC Bank agrees and confirms the LC.After shipment, Sunrise Electronics submits the documents to HDFC Bank for negotiation. The documents are found in order, so HDFC Bank makes payment to Sunrise Electronics and later claims reimbursement from CitiBank, New York, as authorized by HSBC.
Question: Based on the above case, identify the correct roles of each bank under the Letter of Credit transaction.
A. HSBC, Frankfurt
B. HDFC Bank, Mumbai
C. Citi Bank, New York
Choose the correct option:
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