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Remitting Bank

• Ensure workable and concise instructions have been received from the exporter. 

• Determine that the documents, as stated by the exporter, have been received and in the stated number of originals and copies. 

• Prepare a collection instruction adding a unique reference number and including all relevant terms and conditions. 

• Include payment instructions and requirements in the event of non-payment or non-acceptance. 

• Ensure the transaction is stated to be subject to URC 522.

• In accordance with the instructions received, forward the documents to the collecting bank with, if applicable, instructions to forward the same to the presenting bank.

• Forward a copy of the instruction in the form of an acknowledgement to the exporter.

• Monitor the transaction on a regular basis in order to determine the status. Send follow-up messages to the collecting bank as required.

• Upon receipt of settlement or advice of acceptance, process in accordance with the exporter's instructions.

• In the event of non-payment or non-acceptance, advise the exporter of the reason(s) as advised by the collecting or presenting bank and seek further instructions for the handling of the collection.

It should be noted that a remitting bank is not obliged to handle a collection - see URC 522 sub-articles 1 (b) and (c).

Collecting or Presenting Bank

• Ensure the transaction is stated to be subject to URC 522.

• Check that the documents received are as listed in the collection instruction, including in the stated number of originals and copies.

• Review all terms and conditions of the collection instruction to ensure that they are workable and do not contravene any regulatory or internal requirements.

• If the importer is a customer, then also take on the role of presenting bank.

• If not, send to the presenting bank indicated in the collection instruction. If no presenting bank is indicated, determine whether or not a correspondent bank or branch can be utilised. 

• Whether acting as a collecting or presenting bank, provide an advice to the importer to inform them of the receipt of the documentary collection.

• Make available to the importer copies of the documents received or invite the importer into its offices to facilitate payment or acceptance.

• Upon receipt of settlement or acceptance of the draft, process in accordance with the remitting bank's instructions (as contained in the collection instruction).

• In the event of non-payment or non-acceptance, handle in accordance with URC 522 sub-article 26 (c) (3) and/or the instructions contained in the collection instruction. 

It should be noted that neither a collecting or presenting bank is obliged to handle a collection - see URC 522 sub-articles 1 (b) and (c).

This subject is covered in far greater detail within our training module ‘documentary collections in practice' which can be purchased at https://www.tradefinance.training/shop/