D/P Partial payment

[khratha]

Dear All

I wish you could help me clarified below query.
Abc bank send export bill for collection with term D/P amount 10,000.00 to XYZ bank. Few day later, collecting bank XYZ advise that drawee prefer partial payment usd1000.00, 5000 10days after the first paid, 4000.00 10days after second paid. Drawer also inform remitting bank ABC that they accept that partial payment.

My query:
1. if remitting bank ABC communicates with collecting bank that they accept partial payment, can collecting bank releases document to the drawee when drawee pay the first payment? Why?

Appreciate your comment.

Ratha

[picant]

Hi Pal,

The instructions to accept partial payment must be clear about the delivery of shipping documents, specially when a bill of lading is presented.
Follow the art 19 b of URC 522, assuming that those will rule the collection.
Other comments appreciated
Ciao

[khratha]

Dear cao

Thank you very much for your comment.
As per article 19 of URC, collecting bank only release transport document when the final payment is made.

If the drawer insists remitting bank to instruct collecting bank to release transport document prior the final payment made , will the drawer bear the risk of non payment from collecting bank ?

Appreciate your comment .

Ratha

[picant]

Hi Pal,

I think that in collection, drawer will risk always, but risk had been already calculated when dealing with buyer. However all it is possible in collection, release documents free of payment too. So drawer could instruct the banks to accept partial payments, release documents and wait for full payment. Banks will limit these actions if have financed the transaction or the like.
Other comments appreciated
Ciao