Collection Operations
Collection – operations carried out by a bank (the remitting bank) with documents on the client’s instructions, for the purpose of obtaining payment and/or payment acceptance, or releasing documents (after receiving payment and/or payment acceptance, or under other conditions). The remitting bank, upon receiving the client’s instruction, may engage another bank (the collecting bank) to execute it. The remitting bank is responsible for failure or improper execution of the client’s instruction, unless otherwise stipulated in the agreement between the client and the bank.
If the collection instructions received are incomplete, or for some reason the bank cannot execute them, or if not all documents specified in the collection order are received, or if they do not match the order, the collecting bank or the presenting bank must promptly notify the party from which the order was received. If the deficiencies indicated by the bank are not remedied, or corrected instructions are not received, the bank has the right to return the documents and refuse to execute the order.
Documents are presented to the payer in the form in which they were received, except for bank notes and entries necessary to process the collection operation. If the documents are payable upon presentation, the collecting bank must present them for payment immediately after receiving the collection order. If the documents are payable within a certain period, the collecting bank must present them for the payer’s acceptance immediately after receiving the order, and the demand for payment must be made no later than the payment date specified in the document.
If the collecting bank in the Republic of Lithuania does not receive the payment and/or acceptance, it must promptly inform the remitting bank, stating the reasons for non-payment or refusal of acceptance. The remitting bank must promptly pass the information received from the collecting bank to the client and request instructions on further actions. If no instructions from the remitting bank are received within the time limits set by the bank’s operational rules or the agreement, or if no such limits are set – within a reasonable time, the collecting bank has the right to return all documents to the remitting bank.