Buyer Is Refusing To Pay On Maturity Under Avalisation Draft

[nagendraprabu]

It is a avalisation docs under Collection

The collection bank does not expressely stated its co acceptance in MT412 whereas at the time of maturity the buyer is refusing to pay or honour draft

whether the remitting bank has right to claim the collecting bank for payment or not

[mandeep]

Dear nagendraprabu ,

under collection document, once the document is accepted (if discrepancy) by the applicant for payment on maturity and same has been advised to the presenting bank, the LC issuing bank is liable to pay whether applicant is not ready to make payment or not.

in case of discrepancy document, LC issuing bank is not liable to pay until and unless applicant accepts the discrepant document.

thanks

[picant]

Hi Pals,

If the instruction in collectin letter were to deliver documents against buyer's acceptance backed by the collecting bank, the latter is liable to pay in case of buyer's default. Please insist in requiring proceeds to the collecting bank, in caso of no success contact the regulatory body, Central bank etc and report your case.
Good luck
Ciao

[AravindDheena]

It is a avalisation docs under Collection

The collection bank does not expressely stated its co acceptance in MT412 whereas at the time of maturity the buyer is refusing to pay or honour draft

whether the remitting bank has right to claim the collecting bank for payment or not

Hi Prabu,

If co-acceptance is requested by Remitting bank in collecting schedule, then even collecting bank send 'mt412 without mentioning avalization' would mean that collecting bank has satisfied all the instructions laid by remitting bank.
Hence remitting bank has all the right to claim for payment from collecting bank irrespective of whether buyer pays or not.

Hope u would agree with me.