-绒
Remittance & Collection
汇款
托收
Settlement classified :
Remittance
顺汇
: The
buyer takes the initiative in remitting money to
the seller through a bank
Reverse Remittance
逆汇
Collection, Letter of Credit
Remittance
Remittance means the
cross-
border
direct transfer of funds by
banks. The remitting bank pays a predetermined
amount
on the request of remitter
(importer) through the foreign correspondent bank
or agent bank (paying bank) to
payee/beneficiary (exporter) .
Three basic ways for a bank
to transfer funds for its client from the home
country to abroad.
telegraphic transfer TT
mail transfer MT
demand draft DD
T/T is to transfer funds by
cable / telex / SWIFT sent by a remitting bank, at
the request of the remitter. It
instructs the paying bank to pay a
certain sum of money to the beneficiary.
Workflow of T/T
M/T
Differences
between M/T and T/T in the following steps : P48
Step 1: Agree M/T as method of payment;
Step 2: Choose M/T on
application; and
Step 4:
The remitting bank sends payment order to the
paying bank via airmail
Remittance by banker’s demand draft
(D/D)
The remitting
bank at the request of the client draws a banker’s
draft on its overs
eas branch or its
correspondent
bank abroad ordering the
latter to pay on demand the stated amount to the
holder of the draft.
It
is often used when the client wants to transfer
the funds to the beneficiary by himself.
Please identify the drawer,
drawee and payee of the draft under D/D
(4)Remittance
by cable / telex / SWIFT ---Telegraphic Transfer
(T/T)
Reimbursement of remittance
汇款偿付
P49
The
settlement between remitting bank and paying bank
Credit your A/C with us
主动贷记（汇入行在汇出行有账户）
Debit our A/C with you
授权借记
Authorize
Bank X to debit our A/C and credit your A/C with
them
共同账户行
Instruct Bank X to pay the proceeds to
your account with Bank Y
Comparison of T/T,M/T,D/D
T/T: fastest, most expensive, most
reliable form of money transfer because it depends
on the inter-bank transfer system
M/T: slow, not very expensive, less
reliable because the mailed M/T or payment order
could be delayed.
D/D:
slowest, least expensive, less reliable because
the customer should bear the risk of theft,
destruction or loss of the
draft in
transit
3. 2.
Co
llection
（
URC522
）<
/p>
Collection means the method
for handling financial and commercial documents by
banks in accordance with
instruction
from principal in order to:
?
obtain payment
and/or acceptance;
?
deliver
documents against payment and/or against
acceptance
Four main
parties to a collection transaction
权利义务
P53
the principal (seller /
exporter / drawer)
the remitting bank (principal’s /
seller’s / exporter’s bank)
the
collecting bank
the drawee (buyer /
importer)
Other parties :
the presenting bank
the representative in case of need
Legal positions of Banks
URC522
Duties of remitting
banks
Verify the documents
May choose collecting bank
Act in good faith and exercise
reasonable care
Collection is a type of
reverse remittance settlement on commercial credit
basis.