TRADE FINANCE FOCUS ON : Export Bills For Collection

Export Bills For Collection is a documentary collection or a clean collection where the seller (drawer) sends through his banker (Remitting Bank) financial and/or commercial documents which represent the underlying goods to the buyer (drawee) through his banker (Collecting Bank) with instructions that the documents be released to the buyer either against payment or acceptance of the bill.

In an Export Bills for Collection transaction, the customer will be paid only upon receipt of bills proceeds

The definition of terms and current commercial practices to be adopted by all parties involved in Documentary Collections are laid down in the latest version of ICC – Uniform Rules for Collections.

All bank staff who are responsible for the processing of Documentary Collections must be familiar with these rules.

Responsibilities of Remitting Bank

When we handle export documents on behalf of the customers on a collection basis, the bank acts as the Remitting Bank. The principal obligations of the Remitting Bank are:

To act with due care and diligence in following the instructions given by the customer (seller) in connection with the collection and in accordance with Uniform Rules for Collections.

To act in good faith and exercise reasonable care.

To verify that documents received appear to be as listed on the customer’s application.

The Bank has no obligation to check the contents of documents other than to ensure that the details quoted on the bill of exchange agree with details shown in the commercial invoice and that the bills of lading are correctly endorsed.

Processing the Application

Customer must submit their export documents for collection to the bank under the bank’s application incorporating the general conditions which the customer signs to declare that they have read and agreed to be bound by them.  Customers may use their own application formats which have been approved by the Marketing Officer and in which case the customer must sign the bank’s general indemnity form

Upon receipt of the application, all documents listed must be accounted for and the customer’s instructions given must be clear and precise. The customer should be contacted to clarify any ambiguous instructions and/or irregularities.  

If the collecting bank is not nominated, we should contact the customer to check whether is there a particular bank to send the documents to. If not, we will inform him that we will be sending the documents to correspondent bank in the country of the importer.

The application must always be checked and processed without delay.  

When the bill is processed, the export covering schedule printed is attached to the documents and dispatched to the collecting bank by courier or registered airmail if courier service is not available. 

NOTE: Documents drawn under an export LC are also processed on an approval basis if :

1. the documents presented contain discrepancies and at the request of the customer, they are to be sent to the Credit issuing bank on an approval basis without disclosing the nature of discrepancies.
2. clean documents negotiated (without discrepancies) but the customer does not require the bank to finance the bill.