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ISSUES REGARDING COLLECTION INSTRUCTIONS

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Re: Documentary Collections
To: kokonut81
Date: 2010-11-10 10:17

Hi,

According to Article 4 (a) (i), all documents sent for collection must be accompanied by a collection instruction indicating that the collection is subject to URC 522 and giving complete and precise instructions. BANKS ARE ONLY PERMITTED TO ACT UPON THE INSTRUCTIONS GIVEN IN SUCH COLLECTION INSTRUCTION AND IN ACCORDANCE WITH URC 522.

In view of the above, the collecting/presenting bank should act as follows:

1) In the case of absence of instructions:

– check to ensure that the covering schedule has not been misplaced somewhere within the bank;
– advising the remitting bank immediately of the status of the documents received and asking them to give the collection instructions.

2) In the case of inappropriate instructions, i.e., draft at future date is presented with instructions as D/P:

– Release the documents against D/P.

Best regards,
Mr. Old Man
———————————————–

Originally posted by kokonut81:

Dear Mr Old Man,

In Documentary Collections, we as collecting bank receives a set of documents from remitting bank and the scenarios occur on drafts:

1)what if a draft payable at future date is presented but no instructions with respect to D/P or D/A
2)what if a draft payable at future date is presented with instructions as D/P

Pls advise what shd we do on each scenario.
Thank you.

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2 Comments

  1. abrar2

    November 10, 2010 at 9:11 pm

    Provided the collection is subject to URC 522, and all sensible options have been exercised, e.g confirming that the schedule has not been mislaid, and the remitting bank failing to provide clear instructions despite request: Under both scenarions 1 & 2, documents may only be released against payment (Art 7b & c).If the collecting/presenting bank wishes to seek clarification,it should nevertheless be mindful of not causing any delay in making presentation to the drawee.

    Reply

  2. mroldmanvcb

    November 10, 2010 at 10:11 pm

    Agreed, Abrar. In all cases the safest way for the presenting bank is to release the documents against payment.

    Reply

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