presenting bank vs collecting bank

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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ofei
Posts: 93
Joined: Tue Oct 28, 2008 8:51 am

presenting bank vs collecting bank

Post by ofei » Mon Dec 08, 2008 9:48 pm

As we know, the collecting bank and the presenting bank may be different banks. But in the stipulations of URC522, quite a lot of stipulatations are for presenting bank, such as " Advice of Non-payment and/or Non-acceptance","Charges and Expenses" etc. I am puzzled if the presenting bank it refers to is also the collecting bank. If not, won't the collecting bank collect fees? And why can't I find the relative stipulations regulating the charges collected by the collecting bank?

Your comments appreciated.

Ofei

iLC
Posts: 504
Joined: Thu Jun 26, 2008 10:33 pm

presenting bank is also a collecting bank

Post by iLC » Wed Dec 10, 2008 1:49 am

dear ofei,

my understanding says that presenting bank is also a collecting bank. URC 522 3a4
IV. the "presenting bank" which is the collecting bank making presentation to the drawee.

ofei
Posts: 93
Joined: Tue Oct 28, 2008 8:51 am

different banks or same bank?

Post by ofei » Fri Dec 19, 2008 7:55 pm

Dear iLC,
Though URC522 seems to admit presenting bank is also the collecting bank. But here in China, most textbooks state that the presenting bank and collecting bank may either be the same bank or different banks. How to explain? Still puzzled... :?

Ofei

iLC
Posts: 504
Joined: Thu Jun 26, 2008 10:33 pm

i can understand

Post by iLC » Sat Dec 20, 2008 10:19 pm

i can understand the point of views of those author. In fact I have seen a number of materials giving similar statement and I don’t disagree with them. They are classifying the URC operation by the time of their occurrence. Certainly the presetting bank occurs after the collecting bank and that leaves a chance for the presenting bank and collecting bank to be different. But this is an elementary idea and has a logical error. One need to understand that a collecting bank, at any stage of the collection process, will always treat a incoming collection document as if it has been received from a remitting bank. Thus any bank other than the remitting bank becomes a collecting bank. The presenting bank is also therefore a collecting bank but present the document to the drawee instead of another collecting bank.

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