A method of transferring funds internationally. The simplest and least expensive method of remittance can be affected by International Cheques (bank draft) or Telegraphic Transfer. These are the most commonly used forms of payment for export and import trade.
International Cheque (Bank Draft)
An International Cheque is similar to a bank cheque but is drawn on an overseas bank. Payment is made to the payee upon satisfactory identification being provided. Where this method is used, the relative currency is sold to the importer by their bank in the form of an International Cheque (on-demand bank draft).
This method of transferring funds covers Inward and Outward Telegraphic Transfers.
For an Outward Telegraphic Transfer when a foreign currency is involved, the currency is sold to the importer by their bank instructing them to pay a named party (beneficiary) a specified sum of money by order of the remitter (applicant). A payment instruction advice is subsequently dispatched to the bank's overseas correspondent via SWIFT. The beneficiary will receive payment within two (2) working days depending on currency and amount.
For an Inward Telegraphic Transfer when a foreign currency is involved, the currency is bought from the exporter by their bank and funds credited to their account. A payment instruction advice is received by Arab Bank Australia from an overseas correspondent via SWIFT.
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