The Parties to a Collection

The parties to a collection are as follows.

1. The principal. This is a customer who entrusts the operation of collection to his bank. For our purposes, this might be

(a) an exporter in the UK entrusting the collection to his UK bank; or

(b) a foreign supplier of goods to a UK company entrusting the collection to a bank in his own country.

2. The remitting bank. This is a bank to which the principal has entrusted the operation of collection. For example, if a UK exporter entrusts a collection to his UK bank, this bank will be the remitting bank in the collection.

3. The collecting bank. This is any other bank, apart the remitting bank, involved in processing the collection orders. In our example of the UK exporter, this will be an overseas bank to which the UK remitting bank sends a collection order.

4. The presenting bank. This is a collecting bank which makes the presentation to the drawee. (The drawee is defined as “the one to whom presentation is to be made according to the collection order.)

Exporter

Remitting bank

Collecting bank

May be the same bank

Presenting/collecting bank

Buyer

For a clean collection, the commercial documents are sent direct by the exporter to the overseas buyer. The remitting bank which, in turn, will use the services of the collecting/presenting bank) will be asked to arrange for:

(a) payment of a bill of exchange on sight, or payment of a promissory note or cheque; or

(b) acceptance of a term bill of exchange. The bank will then be instructed to arrange for the payment to be obtained when the bill matures.

Дата добавления: 2015-09-07