Inward Bills For Collection - No Protest Clause

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WARLORD9609
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Inward Bills For Collection - No Protest Clause

Post by WARLORD9609 » Tue Oct 01, 2013 1:19 pm

Hi all,

I have received an Inward Bills for collections (Documents against Acceptance), however, the following points are noticed:

1) No protest clause on the Covering schedule.
2) Client does not maintain a Facility Limit with us.

What would you do if you find the following points?

abrar
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D/A

Post by abrar » Tue Oct 01, 2013 9:29 pm

Since there is no obligation for you to cover the drawee's obligation to pay at maturity, there is no consideration of your client's "facility limit" being utilised.

If the schedule does not require you to protest in the event of non-acceptance, nothing more needs to be done by you other than to advise the presenter (Remitting bank) of the non-acceptance. Refer to Article 24 of URC522

WARLORD9609
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Additions

Post by WARLORD9609 » Tue Oct 01, 2013 11:22 pm

Thanks Abrar,

Let me add here that our client will accept the documents and will endorse the back of the draft.

In addition, the documents presented by the Remitting Bank are: Draft, Invoice and delivery note , the delivery note is showing that goods are received already by the drawee.

For now let me know if my procedure is correct in releasing docs.

1) I will inform drawee through intimation that IBC docs received by us, and that they shall come and endorse the back of draft, our stamp which states (accepted to be paid on dd/mm/yyyy) will be printed on the back of draft.

2) we release docs. to them at the same time keeping the draft with us.
3) send a swift to the remitting bank stating that ( Drawee accepted the bill, we will remit proceeds of USD xxxxx on maturity date xxxxxx depending on the availability of funds in the drawee's account).

Tell me if the above is ok? and what recommendation u have?

abrar
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D/A

Post by abrar » Wed Oct 02, 2013 12:21 am

All looks ok. However, under 2. I would offer both options: to return draft for re-presentation at maturity, or to retain in your files.

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Debit authorisation letter

Post by IJTUDU » Thu Oct 03, 2013 7:57 pm

Just to add, for inward collection bills, fund will be remitted on maturity date only when drawee has given an authorisation letter / mandate to debit their account for the bill amount and there is sufficient fund available in drawee's account. Normally, banks take the debit authorisation letter / mandate alongwith acceptance of bill of exchange. Merely, availability of funds in drawee's account on maturity date will not give any right to debit drawee's account and remit the fund unless debit authorisation letter / mandate is taken to do the same. Regards - Isaac

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will not give

Post by Anurag » Thu Oct 03, 2013 9:35 pm

availability of funds in drawee's account on maturity date will not give any right to debit drawee's account and remit the fund unless debit authorization letter received.

That means. It is necessary even if, they shall come and endorse the back of draft, our stamp which states (accepted to be paid on dd/mm/yyyy) will be printed on the back of draft.

Is it mandatory practice to all banks?

Kindly confirm.

Brgds

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