Field 58a in a Letter of Credit (LC) is the "Requested Confirmation Party". It designates the bank that is requested to add its confirmation to the letter of credit.
Understanding Field 58a
This field is specifically utilized when the instruction code CONFIRM or MAY ADD is indicated in field 49 of the LC. Crucially, field 58a is only relevant if field 57a, which designates the 'Second Advising Bank', is also completed.
- If field 57a is completed: Field 58a specifies the bank requested to confirm the LC.
- If field 57a is not completed: The instruction in field 49 (CONFIRM or MAY ADD) applies to the receiving bank. In other words, the receiving bank is being asked to confirm the LC.
Key Points:
- Optional Field: According to SWIFT documentation, field 58a is optional for the sending bank.
- Confirmation: Confirmation by a bank essentially means the confirming bank guarantees payment of the LC, in addition to the issuing bank's guarantee. This provides an extra layer of security for the beneficiary (exporter).
- Purpose: Field 58a allows the applicant to specify a particular bank they prefer to confirm the LC, potentially due to an existing relationship or better confirmation rates.
Example
Let's say an applicant wants to issue a Letter of Credit through Bank A (the issuing bank) to a beneficiary in another country. They also want Bank C to confirm the LC because they have a strong relationship with Bank C and believe they will offer favorable confirmation terms. Further, Bank B acts as a second advising bank.
- Field 49: Contains the instruction
CONFIRM. - Field 57a: Contains the details of Bank B, the Second Advising Bank.
- Field 58a: Contains the details of Bank C, the Requested Confirmation Party.
In this scenario, Bank C is requested to confirm the Letter of Credit.
