In a collection, the applicant presents financial bills of exchange or commercial bills of exchange to the bank (the collecting bank) and requests the bank to collect funds against the bills from the abroad payer through the bank's oversea correspondent bank.
It may be categorized into import collection and export collection, where the latter can be further divided into export documentary collection and export clean collection.
? Import Documentary Collection
Introduction
The bank, after receiving the collection documents from the oversea collecting bank, issues a Letter of Advice to the domestic client, advising the client to make payment or perform acceptance against the collection documents.
Features
The advising bank will not review the collection documents so long as the number of copies of documents is the same as that stipulated in the letter of entrustment from the collecting bank.
Handling Guide
The client should process payment/acceptance/dishonor at the bank after receiving the collection bill. In the case of payment against documents, the client can pick up the imported goods by right of the originals of the collection documents after filling out the Verification Form for foreign exchange payment and the international payment declaration form and effecting payment. In the case of acceptance against documents, the client can obtain the original collection documents for pick-up after completing the acceptance procedure. The payment shall be made upon the due date. In the case of dishonor, the dishonor formalities shall be concluded and the collection documents will be retained by the bank.
? Export Documentary Collection
Introduction
The exporter entrusts the bank, by presenting the trade bills, bill of lading (B/L) and the commercial invoices to the bank, to collect funds from the importer or the import bank through the bank's local branch or local correspondent bank.
Features
There are basically three settlement ways, sight D/P, forward D/P and D/A.
Handling Guide
Submit the Letter of Entrustment and choose a settlement way, together with related documents.
? Export Clean Collection
Introduction
The exporter submits bills of exchange, such as drafts, checks, and promissory notes to the bank (the collecting bank) and entrusts the bank to collect money from the oversea drawer.
The money is collected against the bills, no additional commercial documents are involved.
Features
Two collection ways, crediting at sight and crediting after payment are for your choice.
Crediting at sight means that our oversea correspondent bank will credit the specified amount of money to the nominated account with the bank once receiving the qualified bills delivered by the bank. We may suspend it for 7-10 days according to the actual situation and then credit the funds directly to the applicant's account if no dishonor notice from the correspondent bank is given during this period.
In the event that the bills of exchange presented by the exporter are not satisfied the requirements of the crediting-at-sight collection, they will be sent to our oversea correspondent bank or directly to the paying bank for collection. The bank will credit the funds to the applicant's account only after the payment is effected.
Handling Guide
Endorse the bill of exchange and submit to the bank for collection.