If the bank pays the price of the imported goods on behalf...

If the bank pays the price of the imported goods on behalf of the L/C holder and does not treat it as loan advanced to him and obtains some profit from the importer on the condition that it will not demand from him the price of the goods till a stipulated date, such a transaction will apparently be in order, because the importer becomes liable for it on account of his having asked the bank to pay the price of the goods.

In case, however, he has obtained loan from the bank and the bank charges interest on it and, in such circumstances, the bank advances a loan to the L/C holder and stipulates payment of profit by him and performs the task of import on his behalf, it is not lawful for it to charge profit. These rules also apply to the businessmen who perform this task. Safety Of Goods 2863.

If the bank performs the task of storage of goods or exchange of invoices on behalf of an importer, for example, an agreement is reached between the businessmen, and thereafter the bank pays the price of the goods, and sends the papers to the buyer on the arrival of the goods, and stores the goods in the event of the buyer delaying to take delivery of the goods and renders these services on taking wages from the buyer or an the responsibility of the seller, for example, before an agreement is reached between two businessmen the seller supplies a list of goods to the bank and the bank shows that list to other businessmen and they want to purchase the goods and an agreement is concluded and the bank claims wages for this service from the owner of the goods, it is lawful for the bank to render these services in both the cases and also to claim wages for that, provided that the payment of wages is agreed upon at the time of concluding the agreement or wages are taken in such cares according to common custom, or the bank renders these services on the request of the seller or the buyer of goods.

In case, however, these conditions are not fulfilled the bank is not entitled to claim wages. Some times a buyer does not take delivery of the goods and the bank, after informing him, sells the goods to someone else and deducts from the sale proceeds the amount to which it is entitled. As in such cases the bank is considered to be the agent of the owner of the goods, and usually both the parties (the buyer and the seller) are agreeable to such an arrangement the aforesaid transaction is lawful.