Documentary collections
Under Documentary Collections, the Bank facilitates trading of goods between parties and collection of sale proceeds as well as acceptance of the documents arising there from, both locally and internationally.
Product Features
No credit facility or security required unless there is need for validation
Fees and commissions charged are for document handling as per tariff
Maximum life of a collection should not exceed 180 days
There is no undertaking to the bank to collect any amounts due however KYC must be done at all times
Benefits
Cheaper than LCs in terms of fees and commissions with no impact on credit lines
Easy to establish with shorter processing time
Requirements
Customer instruction to debit any amounts due for payment under import collections
Stamp duty of UShs 10,000 for usance bills for collection
Signed and accepted bill of exchange for usance bills for collection
For export collection, customer’s instruction letter with documents likes Invoice, transport document, certificate of origin, bill of exchange etc.
Formal off taker contracts preferable backed by letters of credit