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D/P Terms

Kids and Babies Supplies
From Egypt
To Spain
592 views / 0 experts
May 07, 2021

What is the meaning of D/P Terms?

1 answer

Ehsan A.
May 07, 2021

Under D/P terms, the exporter ships the goods and presents the Bill of Exchange to his negotiating bank together with B/L and other shipping documents. Then, the bank may pay the exporter against the documents, provided that there is a previous arrangement between the bank and the exporter to do so.

However, in most cases, the bank does not pay the exporter immediately, but mails the documents to its correspondent bank (reimbursing bank/collecting bank) in the importer’s country. The reimbursing bank then notifies the importer on the arrival of the documents. When the importer pays the Bill of Exchange at the reimbursing bank, the bank notifies the negotiating bank in the exporter’s country to confirm payment from the importer.

On the receipt of this notice, the negotiating bank pays the exporter and the settlement is complete. This method of settlement is called “Collection of Documentary Bill of Exchange”.

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