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Inward Documentary Collection

WHAT— What is inward collection

·      Upon reception of entrustment from the foreign correspondent bank, in accordance with instructions received, the bank collect payment from the importer and deliver the relevant commercial documents to the importer.

·      There are two types of inward collection. Under D/P terms, import documents are released to the importer upon payment. Under D/A terms, documents are released to the importer against acceptance.

WHY— Why choose inward collection beneficial to the importer?

·      Low Cost—helping the importer to save expense and control cost.

·      Convenient and Simple —easy to operate, convenient and feasible as compared with letter of credit.

·      Little capital occupied—no prepayment is required at the preparation and shipping stage of the exporter so that no capital is occupied, the importer can obtain the documents and dispose the goods upon payment or acceptance.

·      Improve cash flows—under D/A terms, the importer can obtain the commercial documents and dispose the goods upon acceptance of the bill, and the payment can be made after the goods are sold out and cash inflow realized. There is almost no capital occupation, so that liquidity is improved.

WHEN—When to use inward collection?

·      The importer wants a simple and inexpensive payment method;

·      D/P is recommendable when the importer has sufficient work capital;

·      D/A is recommendable when the importer, who shares good cooperative relation with the exporter, does not have sufficient work capital, and requires financial facility granted by the exporter.

HOW— How does inward collection work?

·         The Operation flow

Inward Collection

·         Points for Attention:

1.  Under D/P terms, the importer should submit the payment certificate, the verification certificate of import payment in foreign exchange.

2.   Under D/A terms, the exporter should accept the draft in accordance with relative regulations and pay at maturity.

3.   Importers are welcome to apply for BOC's trade finance such as loan against imports, overseas short-term finance.

 ADVANTAGES——Advantages of Bank of China

·      Predominant reputation —— BOC has a long history of over 90 years and has been awarded “the Best Bank in China” by “Euromoney” for successively 8 times. With the progressively improved system of corporate governance, overall integration of operation flow, wholly-upgraded service efficiency and rich financial products, BOC has continued to advance toward its goal of becoming a leading universal international bank;  

·      First-class professional service —— BOC, as the first bank in china to provide international settlement business, has absorbed a pool of talented experts. The bank has maintained the largest share of the domestic market and has always been the best against its Chinese peers in this regard;

·      Rich financing products —— Financing products related with import collection provided by Bank of China include loan against imports, overseas short-term finance and shipping guarantee etc.;

·     Safe and timely clearing business —— With four major clearing center, that is US dollar clearing center- New York Branch; Hong Kong dollar clearing center- Bank of China (Hong Kong); Euro clearing center -Frankfurt Branch and Japanese yen clearing center-Tokyo Branch, BOC stands as the leader in domestic market for foreign currency clearing businesses;

·     Advanced technology level —— BOC became one of the first bank to participate SWIFT in 1993. Sophisticated SWIFT system provides our clients with robust guaranty of convenient and high-speed collection service.

·     Global network —— With 12529 domestic branches, 560institutions scattered in Hong Kong, Macao and oversea areas and nearly 4000 agency banks, BOC, exclusively in domestic market, has established a multi-nation and multi-layer high-speed global payment network established through 90 years accumulation;

·     Complete range of currency —— Handles business in complete range of currency, holds absolute leading advantages in the same field in China;

·     Effectively evading risks —— Took the lead to handle long-term exchange sales business, help the client to dissolve overall exchange risks.

Outward Documentary Collection

WHAT— What is outward collection?

·     Entrusted by the exporter, the bank, with the financial and commercial documents submitted by the exporter, collects payment from the importer via its foreign correspondent banks or sister-branches.

·     Export collection can be classified into two types, namely documents against payment (D/P) and documents against acceptance (D/A).

WHY—Why choose outward collection?

·      Convenient and easy to operate as compared with letter of credit;

·      Low banking charges, helping the exporter to save expenses and control costs

·     The importer can pick up the goods only after acceptance or payment. As for the exporter, the risk is relatively lower than that of credit sale. 

 WHEN—When to use outward collection?

·     The credit standing of the importer is well known and the exporter has sufficient funds to prepare the goods and make shipment.

·     D/P is recommended when the exporter in a seller's market.

·    D/A is recommended when the exporter in a buyer's market and importer asks for credit sale. Compared with remittance the forward payment is relatively guaranteed.

 HOW—How to operate the outward collection business?

·         The Operation flow

Outward Collection

·         Points for Attention:

1.  When entrusting the bank to do the operation of outward collection, the exporter should provide: a. Collection order; b. Full set of documents for collection; 

2.  Client doing such business for the first time should also provide the followings: a. Original (duplicate) business license; b. Import-export business operation license; c. Letter of authorization of the legal representative.

3.   In case of non-payment or non-acceptance, the exporter is suggested to entitle the collecting bank in time to assist in disposing the goods;

4.  Under D/A, the payment, in fact, is deferred to the maturity day. It is suggested that the relative costs, such as interests, should be included into the price during the commercial negotiation.

ADVANTAGES – Advantages of Bank of China

·      Predominant reputation —— BOC has a long history of over 90 years and has been awarded “the Best Bank in China” by “Euromoney” for successively 8 times. With the progressively improved system of corporate governance, overall integration of operation flow, wholly-upgraded service efficiency and rich financial products, BOC has continued to advance toward its goal of becoming a leading universal international bank;    

·      First-class professional service —— BOC, as the first bank in china to provide international settlement business, has absorbed a pool of talented experts. The bank has maintained the largest share of the domestic market and has always been the best against its Chinese peers in this regard;

·      Rich financing products —— Full range of trade financing products such as export bill purchase and export discounting are provided to satisfy your extensive demands.;

·      Safe and timely clearing business —— With four major clearing center, that is US dollar clearing center- New York Branch; Hong Kong dollar clearing center- Bank of China (Hong Kong); Euro clearing center -Frankfurt Branch and Japanese yen clearing center-Tokyo Branch, BOC stands as the leader in domestic market for foreign currency clearing businesses;

·      Advanced technology level —— BOC became one of the first bank to participate SWIFT in 1993. Sophisticated SWIFT system provides our clients with robust guaranty of convenient and high-speed collection service.

·      Global network —— With 12529 domestic branches, 560institutions scattered in Hong Kong, Macao and oversea areas and nearly 4000 agency banks, BOC, exclusively in domestic market, has established a multi-nation and multi-layer high-speed global payment network established through 90 years accumulation;

·      Effectively risk-evading system —— The first bank in china to offer Renminbi forward purchases and sales for foreign exchange, BOC accumulated rich experiences in helping the clients to dissolve overall exchange risks.

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