Is MT412 Enough For Collecting Bank To Aval On Collection?

Simple is Beautiful; the only thing came in my mind when thought of documentary collection. And I think more and more people are thinking the same in these days. Documentary Collection offers us far greater security than selling on open account; but not as much as a documentary credit. We should therefore be more cautious before starting selling using this method of payment. Documentary Collection Forum is an effort to help you on this way – admin; besttradesolution.com
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Chamnan
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Is MT412 Enough For Collecting Bank To Aval On Collection?

Post by Chamnan » Wed May 29, 2013 10:46 am

Dear all Experts

I've the question related to aval collection as below:

1. In the remittance letter with the instruction of aval and the collecting bank send MT412 to remitting bank without stated any instruction agree to aval. Could we consider MT412 is enough for collecting bank aval on the collection?

2. If the collecting bank agree to aval on the collection, Must the bill of exchange stamp accept by drawee and collecting bank or stamp the aval ?
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Your comments is highly appreciated.

OLUKAYODEJAMES
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AVAL ON COLLECTION.

Post by OLUKAYODEJAMES » Fri Jul 05, 2013 3:49 pm

1. IN RESPONSE TO THE QUESTION ON AVAL ON A COLLECTION ORDER. IT IS EXPECTED IN LINE WITH THE URC 522 PROVISIONS THAT A COLLECTING BANK MUST CATEGORICALLY STATE ON ITS ACCEPTANCE MESSAGE IN ADDITION TO THE DRAWEE'S ACCEPTANCE ITS OWN UNDERTAKING TO AVAILISE SUCH A COLLECTION. FAILURE TO DO SO PRESENT A RESPONSIBILITY ON THE PRESENTING BANK TO RECONFIRM THE AVALISATION STATUS FROM THE COLLECTING BANK.
2. IF THE COLLECTING BANK AGREES TO AVAIL ON A COLLECTION, SUCH A BANK NEEDED NOT STAMP THE BILL OF EXCHANGE ALONG WITH THE DRAWEE. A SWIFT MESSAGE INDICATING ITS RESPONSIBILITY TO AVAIL SUCH A BILL IS ADEQUATE.

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