Discrepancy (letter of credit)

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-01

// THE SHORT ANSWER

A discrepancy is any point on which the documents an exporter presents under a letter of credit fail to match the credit's terms — a date, a quantity, a description, a missing signature. The issuing bank may refuse discrepant documents and the tolerance is exact, so an exporter can ship perfectly and still not be paid until the buyer agrees to waive the discrepancy — by which time payment depends on the buyer again. A clean presentation record is therefore part of an exporter's credit: years without a discrepant document are evidence of a back office a bank can rely on.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.