Documentary Collection

Documentary Collection

The documents for collection service is a process that takes place between banks with commercial documents which require transfer to the importer by order of the exporter in exchange for the latter’s receipt of the documents. Payment according to the terms agreed upon the collection is either handing over the documents for payment of their value or by accepting them. Documentary collection is usually used if the relationship between the seller and buyer is good and based on mutual trust, as well as the financial position the countries.
The documents for collection service can be defined as a collection method by the bank for the amount owed by the buyer in return for receiving the required documents. The bank acts as an insurance agent or intermediary between the exporter (the seller) and the importer (the buyer). It provides the importer documents indicating the shipment of good under the instructions of the exporter or his bank, in return collect the value of the documents required by the importer in favor of the exporter.