In trade finance, discrepancy handling is the process a bank follows when documents presented under a letter of credit do not match its terms, the applicable rules or each other. Common discrepancies are late shipment, late presentation, an expired credit, a missing document, or inconsistent descriptions of goods across the invoice and bill of lading. They are found during trade document examination, and they release the bank from its duty to pay.
Under UCP 600, a bank that decides to refuse must send a single notice listing every discrepancy no later than the close of the fifth banking day after presentation, and state whether it is holding or returning the documents. A bank that misses this deadline loses the right to refuse. The exporter may correct and re-present documents if time allows. Otherwise the issuing bank may ask the applicant to waive the discrepancies; most are waived, usually with a fee deducted from the proceeds.