Draft on Document Collection Basis

Gemini · Post by **Gemini** » Wed Mar 07, 2012 8:34 am

Dear all,
In Documentary Collection basis, as beneficiary bank I often ask draft to the beneficiary. My question is which party should be drawn at the draft, is it drawn on paying bank or drawn on applicant ? Thank for your explanation.

leekaiyin55 · Post by **leekaiyin55** » Thu Mar 15, 2012 1:01 pm

Dear Gemini,

Under Documentary Collection, it is the drawer (i.e. exporter/ beneficiary) who draws the draft on the drawee (i.e. importer) for payment (i.e. D/P) or for acceptance (i.e. D/A). It differs from LC transaction in which drawee is drawn on the LC issuing bank.
Basically, the role of banks under Documentary Collection are an agent rather than acting as parties understaking to pay.

Gemini · Post by **Gemini** » Tue Mar 20, 2012 1:20 pm

Dear Lee,
thank you for your explanation,since i am new at this trade services group.

Regards,

vinodkoli · Post by **vinodkoli** » Fri Mar 23, 2012 4:47 pm

Draft is drawn in the name of Importer

sandeep_mt · Post by **sandeep_mt** » Sun Jun 03, 2012 11:03 pm

Draft presented under Documentary collection should be drawn on drawee not on collecting or presenting bank.

Toufiqul Huq · Post by **Toufiqul Huq** » Tue Jun 19, 2012 4:19 pm

Draft will be drawn on Importer. But will be presented through remitting bank.

aemrek · Post by **aemrek** » Fri Sep 21, 2012 4:57 am

Other comments cleared that the difference between drawee`s position on D/C and L/C. The drawee is the importer on D/C and draft has to be drawn on the importer.

Virendra · Post by **Virendra** » Thu Sep 27, 2012 5:45 pm

Agree with Lee!!!