Period Of Maturity

Acceptances of member banks against imports and exports are limited to drafts "having not more than six months' sight to run, exclusive of days of grace."

Relating to Maturity of Bank Acceptances Based on Imports and Exports

Duration Of Acceptance Credits May Exceed Six Months

A national bank may enter into an agreement having more than six months to run, by the terms of which it may obligate itself for a period of time specified in the agreement to accept drafts drawn upon it, provided such drafts grow out of transactions involving the importation or exportation of goods, and the individual drafts have not more than six months' sight to run. This distinction is emphasized by the Board in an informal ruling as follows: While a letter of credit or credit agreement may lawfully be made by a national bank which will extend by its terms for a period exceeding six months, the agreement must not be of such a character as will impose upon the holders of drafts accepted thereunder any obligation to renew such drafts so that the period of acceptance shall exceed six months in duration as to any specified draft.

Renewals Of Bank Acceptances Permitted To Be Made For Reasonable Periods

Upon payment of an acceptance, the accepting bank may for a reasonable period accept new drafts for the financing of the original transaction, even after the shipment and delivery of the goods, provided such renewals be stipulated in the original contract as an incidental condition of the transaction of importation or exportation upon which the acceptance is based.