Remittances

Collections

The Collection is a product/ service used for settling foreign or local trade payments. The purpose of the Bills for Collection is to provide our customers with a standard method for settling due amounts relating to the import/ export of goods and services.

A collection bill may be sent at the request of our customer (seller-drawer) to collect an amount due for the supply of merchandise, to the buyer (drawee) in accordance with their mutual agreement either for sight payment (D/P basis) or usance payment (D/A basis).

Payment to the seller under usance bills could be guaranteed by Al Ahli Bank of Kuwait-Egypt to the bank credit policy requirements.

Product Characteristics

A bill for collection is an amount of money payable by the drawee to a drawer through banks.

Such bills are divided into:

  1. Clean Collection: Contains only financial papers (e.g. Draft, Bill of Exchange or promissory note)
  2. Documentary Collection: Contains financial & amp; commercial papers (e.g. Shipping Documents)

Payment terms

  1. D/P: To deliver documents against payment
  2. D/A: To deliver documents against acceptance

The collection bills are either Incoming Collections, a service provided to the buyer/ importer or Outgoing Collections, a service provided to the seller/ exporter.

Avals

Drafts or bills of exchange could be avalized. An aval is an unconditional and irrevocable guarantee by the bank (at buyer end) written on the face of a bill of exchange or promissory note. Collections are governed by the Uniform Rules for Collections, 1995 Revision, ICC Publication No. 522.

Benefits

  1. Benefits of a collection to the seller: Title documents could be channeled through the banking system. Faster collection of funds
  2. Benefits of a collection to the buyer: He could defer payment until goods arrival (acceptance), thus, obtaining full finance from the seller, having also the ability to obtain finance from banks
  3. Benefits of a guaranteed payment to the seller: He receives immediate cash (if the bill is discounted). He is relieved from administration and receivable collection problems and avoids sovereign and buyer risks
  4. Benefits of a guaranteed payment to the buyer: He is provided with another form of finance and avoids complex loan documentation

Application Forms

Documentary Credit Application 377 KB Shipping Guarantee / Bill of Lading or Air Waybill Endorsement Application 323 KB Export Documentary Collection Application 2.6 mb Letter of Guarantee Application 303 KB Collection Application for Commercial Papers 1 mb Transfer/Bank Draft Application 481 KB