PARTIAL PAYMENTS UNDER COLLECTION

QUERY

Partial Payments under collection

Experts,

Partial payments are allowed under collection,
When Partial payments are allowed, does buyers bank release documents to buyer or it will release dox to buyer only when it gets full payment from buyer.
Comments, appreciated!!!!

Thanks
M.

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COMMENT

Partial payments under collection

Hi M.

It depends on the remitting bank’s instructions given to the collecting bank.
In reality there are collections where partial amount is to be made at sight and the balance by acceptance of a separate draft payable in a future date.

The remitting bank may instruct the collecting bank to release the documents upon payment of an agreed partial amount and the acceptance of the time draft for the rest amount.

In comparison with D/A collection, this mixed payment instruction helps the exporter, to some extent, reduce the payment risk.

Please refer to URC 522 article 19 (b).

Best regards,
Nguyen Huu Duc …