Drawee on Drafts

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Question from D.C.Y.:
Dear Mr. Lee,
As a premium member, I have an interesting case to report which you can share with the members who subscribe to your website.
I received an L/C from a bank in India advised through "Bank AAA" with the following stipulations:-
Field 41D Available with/by: I will name it as "Bank AAA" in Singapore
Field 42C : Drafts at: 90 days from date of negotiation
Field 42A : Drawee : Bank AAA in Singapore
Field 47 Additional Conditions
Point 13 : All bank charges outside India are for beneficiary's account except usance interest at 0.25 pct p.a. above LIBOR and confirmation charges at 0.70 pct. p.a. which are for applicant's account.
Point 14 : Separate drafts for invoice value and usance interest must be presented.
Field 49 Confirmation Instructions: Confirm
From the terms in the L/C it seems that I have to prepare two sets of drafts (one set for the invoice value of the goods and another set for the 90 days usance interest) which, according to Field 42A, are to be drawn on Bank AAA which is the advising, confirming as well as the accepting/discounting bank. I was surprised to be informed by Bank AAA that since the interest is to be paid by the applicant, the drafts covering the usance interest should be drawn on the Issuing Bank while the other set of drafts for the invoice value is drawn on Bank AAA in Singapore. I argued that as far as the credit is concerned, there is only one drawee on whom the drafts are to be drawn but this argument was not accepted by Bank AAA. I have no alternative but to prepare the drafts according to what Bank AAA instructed me to do.
For my learning experience, I would appreciate if you could, as usual, enlighten me with your valued views and opinion on this case. Thank you so much for your assistance and willingness to share your expertise with those in the documentary circle.
Warmest Regards
D.C.Y.

Response from T.O. Lee:

Dear Mr. Y.,

Fields 42 A & C deal with the drafts under "availability" by acceptance.

Field 47 A deals with additional condition with a scope unrestricted.

Although they are all dealing with drafts, yet they are separate issues and one should not mix them together.

Hence the drawee in field 42 A and 47A can be different.

I also note that the LC has conflicting instructions listed hereunder:

Field 41D Available with/by: I will name it as "Bank AAA" in Singapore

Field 42C : Drafts at: 90 days from date of negotiation

Field 49 Confirmation Instructions: Confirm

For an acceptance LC by AAA Bank in Singapore, confirmed by the same accepting bank, the drafts should be drawn on AAA Bank in Singapore but it cannot negotiate its own undertaking*. It can only discount. In that case how would you calculate the maturity date that is based on date of negotiation?

*According to the definition of negotiation in article 2 of UCP 600, bank AAA cannot negotiate a draft drawn on itself.

Please bring this forth with the issuing bank in India for clarification.

Best regards,

T. O.

This document is the 1st episode of "Drawee on Drafts".

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