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Dear expert

I would like to ask question regarding unpaid Documentary againts acceptance.

Is it necessary for collecting bank to ask for collateral when the drawee accept the document?

If on maturity date drawee not pay, can the remitting bank or drawer sue collecting bank?

Thank you

Hi Pal,

normally acceptance is by the buyer, except when the presenting bank is required to provide a guarantee.
So no collateral or credit grantng is required.
In case of doubt a remitting bank clarification may be necessary.
Other comments appreciated
Ciao

D/A or D/P transactions are basically depending on applicant`s credibility and financial situation.
A bank should be doing thorough credit due diligence before entering any Collection transaction.
Asking for collateral at the stage of a D/A being unpaid on maturity date seems way too late.

Regards,

Either D/P or D/A does not guarantee a payment unless other products (such as avalisation) are chosen within the transaction. Even if the bill has been accepted, it does not mean that the payment will be made