Chapter 3

1. Chapter 3 Payment Methods - Remittance 专业PPT/商演示设计制作

2. Review Question 1 : What are the meanings of a bill of exchange, a promissory note and a cheque? Question 2 : Could you list the essential items for a bill of exchange? Question 3 : Are there any differences among a bill of exchange, a promissory note and a cheque?

3. International exchange refers to operational activities related with the currency conversion and transfer of funds between countries in order to settle the claims and debts by payment instruments through banks. -- In broad sense: the international settlement -- In narrow sense: international bank remittance Types: International Exchange Remittance Reverse remittance contract contract payer payee payer payee Bank A Bank B Bank A Bank B

4. Vostro Account When a foreign bank maintains a current account with a local bank ,from the point of a domestic bank, the account is a vostro account Nostro Account When a domestic bank maintains a current account with a foreign bank ,from the point of a domestic bank, the account is a nostro account How to transfer money between banks Vostro a/c (1)in cover,we have credited you’re a/c with us Remitting bank Paying bank (2)in cover,please debit our a/c with you Nostro a/c

5. Definition and parties of a Remittance • Remittance refers to a bank (remitting bank), at the request of its customer (remitter), transfers a certain sum of money to its overseas branch or correspondent bank (paying bank) instructing it to pay a named person domiciled in that country • Parties of a remittance • -- Remitter • -- The Remitting Bank • -- The paying bank • -- Beneficiary or Payee

6. Methods and procedures of remittance • Remittance can be classified as M/T、T/T、 D/D • Remittance by Airmail the remitting bank transfers the funds by mailing a P.O. cheap but slow • Telegraphic Transfer the remitting bank sends the P.O. to the paying bank by cable, telex, or SWIFT, authorizing the paying bank to make payment to the payee. • fast ; safe ; limited time for banks to keep the funds

7. Methods and procedures of remittance • Procedures of M/T、T/T (8) payee remitter (1) (2) (4) (5) (6) (3) Remitting bank Paying bank (1)Remittance application with funds and commission; (2)receipt (3)sends P.O. /telex/SWIFT instructing paying bank to make payment (4)after authenticating, notifies the payee (5)upon receipt, the payee provides the paying bank a receipt (6)the paying bank debited the remitting bank’s a/c and make payment (7)sends the debit advice and payment receipt from payee to the remitting bank (8)the debt is discharged

8. Methods and procedures of remittance • Remittance can be classified as M/T、T/T、 D/D • Remittance by Bank Demand Draft the remitting bank draws a bill of exchange on the paying bank ordering the latter to pay on demand a certain sum of money to the beneficiary who will also be the payee of the draft. convenient and transferable

9. Payment in advance --The time of payment comes before the delivery of goods or the provision of services --This method is favorable to the exporter while putting the importer at a great risk of non-delivery Open Account -- Exporter will make the delivery of goods or the provision of services before importer makes payment -- This method is favorable to the importer while putting the exporter at a great risk Application of remittance

10. Consignment -- Exporter ships the goods to the importer and retains the title to the goods until the importer make payments -- This method is favorable to the importer while putting the exporter at a great risk Application of remittance

11. Preview • Compare the advantages and disadvantages among M/T, T/T and D/D? • Analysis the risks for importer and exporter • Under remittance?

12. Thank You