Payment under reserve

Payment under reserve,

Definition of Payment under reserve:

  1. Provisional payment made to the beneficiary of a letter of credit (L/C) where the documents submitted under the L/C requirements have discrepancies. The advising bank (which advances the payment) holds the balance pending confirmation from the issuing bank regarding the acceptance of documents, and has recourse against the beneficiary for the advanced payment if the issuing bank refuses to accept the documents.

Meaning of Payment under reserve & Payment under reserve Definition