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Hi Pals,

Is it a common practice now for Collection Bills at D/P Sight to be presented without Drafts?Any particular reason or difference between D/P Sight bills presented with or without Drafts?

Thank you for your comments.

Hi Pal,

draft or better bil is the tipical way to give the buyer a sort of receipt for the money he pays. In my Country due to fiscal duties it is better to avoid such practice when it is not necessary. So in D/P at sight documents are enough, naturally in usance draft, specially when accepted, the draft will be discounted may be the fiscal duty will be repay by a lower discount rate vs advance on invoice.
Other comments appreciated
Ciao

Dear Friends,

The spirit of D/P is to "release documents against payment". Draft is excessive in the sense that it plays no value-added to the txn. That's why it is more common that D/P transaction is absent of draft. It happens the same to LC transaction wherein payment LC calls for no draft.

Thank you.

Collection means handling of the documents(financial or commercial) by banks, in accordance with instructions received, in order to:
Obtain payment and/or acceptance
Deliver documents against payment and/or against acceptance (D/P, D/A)
Deliver documents on other terms and condition

Documents against payments: Documents are realized to the buyer once he honors a sight bill of exchange issued by the seller and makes immediate payment to the seller.

Draft is additional security to the transaction.