Collecting Bank

A Collecting Bank handles the collection of payment from the buyer and forwards the proceeds to the seller’s bank in a documentary collection transaction.

In a documentary collection, the Collecting Bank ensures the buyer receives the necessary documents to obtain the goods. Examples of these documents include bills of lading, invoices, and certificates of origin.

The Collecting Bank operates under the instructions of the seller’s bank, known as the Remitting Bank. It does not guarantee payment but facilitates the transaction process.

Banks involved in international trade, such as HSBC, Citibank, and Deutsche Bank, often act as Collecting Banks.