(a) A bank may accept:

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Terms Used In Tennessee Code 45-2-608

  • Bank: means any person, as hereinafter defined, doing a banking business subject to the laws of this or any other jurisdiction and, for the purposes of supervision, examination and liquidation, includes industrial investment companies and industrial banks authorized by chapter 5 of this title. See Tennessee Code 45-1-103
  • Person: means an individual, corporation, firm, trust, estate, partnership, joint venture, or association. See Tennessee Code 45-1-103
  • United States: includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(1) A draft that has not more than six (6) months’ sight to run, exclusive of days of grace, and is drawn to finance the purchase of goods with maturity in accordance with the original terms of purchase, or is secured by shipping documents transferring or securing title to goods or by receipt of a licensed or bonded warehouse or elevator transferring or securing title to readily marketable, nonperishable staples; and
(2) A draft that has no more than three (3) months’ sight to run, exclusive of days of grace, and is drawn by a bank outside the continental limits of the United States for the purpose of furnishing dollar exchange for trade.
(b) A bank may issue a letter of credit, but unless the authority conferred to draw upon the bank or its correspondents is limited to the drafts that a bank is authorized by this section to accept, the amount of the credit outstanding at any one time shall be deemed to be a loan to the person for whose account the credit was issued.
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