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DOCUMENTARY AND CLEAN COLLECTION |
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  | Documentary and clean collection is designed for: |
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Legal entities, traders
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| Documentary and clean collection characteristics: |
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Documentary and Clean Collections are traditional payment instruments used both in domestic and foreign trade transactions. The counterparties make use of this instrument in those cases when the risk involved in the transaction does not require the bank's undertaking - in contrast to letter of credit or guarantee - however the business partners are reluctant to carry out the transaction with no form of security at all. As the payment under the Collection is not secured by the bank, this method of payment is appropriate when the seller does not doubt the buyer's willingness and ability to take over the goods and to pay for them, as well as the stability of the political, economic and legal environment in the buyer's country.
With the Collection the seller usually submits to the bank the shipping documents along with the instructions - the conditions under which the documents presented are to be released to the buyer. Such a condition might be to release the documents against payment or against acceptance of a draft. When a draft for collection is not accompanied by commercial documents (e.g. invoices, bills of lading, certificate of origin ...) we talk about Clean Collection.
1. Contract between Buyer and Seller
2. Collection instructions and documents
3. Collection order and documents
4. Notification to a debtor on the receipt of the documents and terms of the Collection
5. Execution of the respective collection instructions
6. Release of the documents
7. Payment
8. Taking over of the goods
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| Documentary and clean collection - benefits: |
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- Smooth handling of the deal for the exporter who entrusts the bank with the documents for collection
- The bank will not release the documents until the buyer submits a payment order or meets other terms of collection
- Higher security of payment in comparison to clean payments
- Lower bank fees in comparison to letter of credit
- Simple and secure processing
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| Documentary and clean collection allows you: |
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- to entrust the bank with your collection order and to obtain higher security of payment compared to clean payment
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| How to obtain more details about this product/service? |
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For further details approach your Relationship manager or visit any KB Bratislava business center. You can also send us an e-mail to koba@koba.sk.
