Nonpayment of Accepted Bill under Collection

[moyaz]

It was a documentary collection wherein docs had been sent to collecting bank with a bill of exchnage drawn to be paid 75 days after acceptance. The B/L was issued to the order of remitting bank and remitting bank endorsed it to the order of collecting bank. The collecting bank sought authorization from the remitting bank if it could release docs agt acceptance after obtaining a promissory note or a written undertaking from drawee subject to a fixed maturity date. The remitting bank authrized the collecting bank to do so via authenticated SWIFT message. Now, the collecting is not making payment even a long period after maturity. How can the remitting bank get the payment from the collecting bank?

[picant]

Hi Pal,

the collecting bank delivered documents without its own undertaking to pay, so the bank it is not responsible for the collection's payment at maturity.
Bill of exchange, promissory notes or draft are normally endorsed "for collection only" and payment is in the responsability of the drawee only. IUf the bill is backed or avalised by a bank, this bank will be responsible. Depending on the local banking law, a bank not paying its own engagements will risk a legal action and its banking licence.
Now the only thing to do, and ask the collecting bank to protest the promissory note, then to return the protested item, deliver it to the drawer that will ask an international lawyer to do a legal action towards drawee(and towards who made a mistake in managing the collection)
Other comments appreciated
Ciao