A cost-effective method of settling international trade transactions; where the buyer's and seller's banks act as intermediaries in the collection of trade payments.
A Documentary Collection is the collection, through a bank, of monies owed by a buyer, against delivery of certain documents.
The banks involved in the collection process do not make any guarantee for payment, and, therefore, there is no requirement to mark the collection against your banking facility. If your bank is requested to 'avalise' the bill of exchange, then the amount of the bill will be marked against your facility.
Usually, the payment method is agreed with the seller at the time of negotiation of the sales contract. The seller will request payment via a documentary collection.
The exporter retains ownership of the goods until either payment or acceptance is received
The bank acts for the exporter, by presenting commercial documents to the buyer (importer) along with a payment demand or bill of exchange
Accepted bills can be used to get financing
Settlement is normally faster than using the Open Account method
The handling of export collections is governed by the ICC Uniform Rules for Collections
Unless the buyer pays or commits to pay at a future date, no documents will be handed over
We will act as a collecting agent enabling the exporter to obtain acceptance and/or payment from the importer against delivery of documents:
Simply negotiate the collection terms with the importer, ship the goods and then hand the documents to FNB (Trade & Working Capital Division) with collection instructions
The bank would require the banking details of the importer
Discuss the transaction with FNB Botswana Trade & Working Capital Division to ensure all collections instructions are clear, workable and unambiguous