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URC stands for unified riles of collections. These a rules which sets guidelines as to how debts, owed money and assets are to be collected. These rules were set to resolve the daily issues being faced by practitioners. According to this, the principal and remitting bank should attach a separate document, collection instruction, to every transaction according to the rules. It makes clear that banks are not required to examine documents and look into instruction.
These rules basically outlines what banks should do with documents against acceptance (D/A) and documents against payment (D/P). URC 522 states that banks are under no obligation to store and insure goods when instructed.
According to existing guidelines given by ICC under the URC522 provide protection to transactions of good and services overseas. But when it comes to electronic transactions, URC 522 rules falls short. They are limited in number thus doesn’t cover the whole ambit of issues that could occur in online transactions.
As trade is being digitalised by numerous innovations that are being done in this field, and the industry moving towards open bank interoperability, it is quite inevitable that digital trade finance will be adapted more. As a consequence of this, ICC has come out with new rules and guidance to supplement the URC 522. These recently updates rules are called eRules.
With the implementations of eRules we can expect evolution of electronic presentations and automated compliance checking systems. This would be breakthrough in the world of documentary credits.
The technology landscape is continuously evolving and getting disrupted with new age technologies like Internet of Things, Smart contracts, Artificial Intelligence, Distributed Ledger technologies, Due to this the world of digital trade finance also sees rapid changes, These eRules have left space so that they can accommodate and adapt according to new technologies.
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