Documentary Collection under URC 522

Documentary Collection is governed by the Uniform Rules for Collection, ICC Publication No. 522 commonly known as URC522.

  

Types of documentary collection:

DP (Documents against payment) Documents are released to the buyer on payment of the bill

DA (Documents against acceptance) Documents are released to the buyer after he accepts the bill of exchange  and provides an undertaking to pay the bill on the due date.

Parties involved in documentary collection:

Seller (also known as Drawer/Exporter/Principal): The seller ships the goods and submits the documents to his bank with instructions for collection of payment.

Remitting bank: This bank is the seller’s bank. The remitting bank sends the documents to the buyer’s bank (Collecting/Presenting bank)

Collecting bank: This bank is any bank other than the remitting bank which is involved in the collection process. A collecting bank forwards the documents and collection instructions to the Presenting bank.  In case this bank presents the documents directly to the buyer, then it also becomes the Presenting bank.

Presenting bank:  This bank is the buyer’s bank. As per definition provided by URC 522, this is also a collecting bank. The presenting bank presents the documents to the buyer for payment or acceptance depending on the collection instruction.

Please note, in most cases the collecting bank also acts as the presenting bank.

Buyer (also known as Drawee/Importer): The buyer pays the bill in case of a sight bill or accepts the bill of exchange in case of a usance bill. The buyers receives the documents on payment/acceptance from the Presenting bank.