Cheque drawn under URC 522

[arifpervaiz]

Cheque drawn under URC 522

1) what is the max time period fo settlement of the clean collection ( Cheaque ) drawn under URC522. ( In case all in order)
2)Is thier any requirment/need for the collecting bank to obtian the acceptance/authority from the issuer of the cheaque before clearance of clean collection ( Cheque) drawn under urc522 if all thing in order and cleint also have a sufficient balance in the account.
3) Is there any obligation on the collecting bank if clean collection not seatteld. ( In case at the of presentation every thing is in order and client have sufficent balance in the account as well and due to collecting bank negelegation drawee withdrew all of his money after the presentation of clean collection)

Regards

Arif Pervaiz

[shahriar]

dear arif,

1) there is no standard time frame for this. its governed by the "reasonable time" i think.
2) no there is no such requirement. A cheque is a instruction to pay; unconditional. if there is balance and there is no stop payment instruction you must honor even if the client request you to delay it unofficially.
3)actually i dont think URC really deal with this issue. anyway, i think the collecting bank has any responsibility. when somebody issues a cheque, its his duty to ensure that there is sufficient fund in the account; no matter when the cheque is placed. its in no way banks responsibility to perform the job of police

regd

shahriar

[nesarul]

Dear,
Query one
1) what is the max time period fo settlement of the clean collection ( Cheaque ) drawn under URC522. ( In case all in order)
My comment:
No such specific rule is in URC-522... but validity of cheque are national issue vary from country to country...
however in case of dishonour of cheque by paying bank, i think we can apply sub-article 26(3):
"

The presenting bank must send without delay advice of non-payment and/or advice of non-acceptance to the bank from which it received the collection instruction.

On receipt of such advice the remitting bank must give appropriate instructions as to the further handling of the documents. If such instructions are not received by the presenting bank within 60 days after its advice of non-payment and/or non-acceptance, the documents may be returned to the bank from which the collection instruction was received without any further responsibility on the part of the presenting bank.

Nesar

[mentis]

There is no max time for collection but that is not reasonable, I think. There should be some restirictions.

[sesha]

There is no restriction in timings with regard to collection and it is not necessary as this is not an obligatin of any bank in the cycle unless avalised.