WHETHER A BANK CAN PLAY A DOUBLE ROLE AS REMITTING BANK AND COLLECTING/PRESENTING BANK

QUESTION

Dear Mr. Old Man,

Recently, we received a collection instruction directly from the drawer which instructed us deliver the document to drawee against payment. If we agree to handle this collection, it means that we are remitting bank, collection bank and presenting bank under URC 522.

However, the drawer does not have an account at our bank so they request us remit the payment to their account hold with a bank in UK. And according to  sub-article 3 (a) (iii): “the collecting bank which is any bank, other than the remitting bank, involved in processing the collection”

I woulk like to ask your opinion that is it possible when a bank can play the role of both remitting bank and collecting bank under URC 522?

Thank you very much

Yours sincerely,

LHC

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ANSWER

Hi,

I have come across some cases where the principal (exporter/seller/drawer) from abroad remits the documents for collection directly to my bank, with no remitting bank involved in the transaction. In the covering letter, the principal instructs my bank to deliver the documents to the drawee against payment or acceptance as the case may be and instructs us to remit the proceeds directly to his account with his bank in his country. Please note that in this case MT103 (and not MT202) is used to remit the proceeds to the principal’s account.

In this case my bank is acting as a collecting/presenting bank receiving collection instructions directly from the principal. No remitting bank is involved in this transaction.

Your case is just the same as my bank’s.

I hope my answer is clear.

Kind regards,

Mr. Old Man