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

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Presentation on theme: "Chapter 3 专业 PPT/ 商演示设计制作 Payment Methods - Remittance."— Presentation transcript:

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

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? 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  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: payer payee Bank ABank B contract Remittance payer payee Bank ABank B contract Reverse remittance

4 How to transfer money between banks  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 Remitting bank Paying bank (1)in cover,we have credited you’re a/c with us (2)in cover,please debit our a/c with you Vostro a/c 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 payee remitter Paying bank Remitting bank (1)(2) (3) (4)(5)(6) (8) (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 Application of remittance  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

10 Application of remittance  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

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


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