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Bank Aval

  • Stephen A. Jones
Chapter

Abstract

Bank aval provides a bank’s undertaking to pay a debt obligation of the end-buyer at maturity. It is often associated with documentary collections where release of the document of title can be made conditional upon the provision of a bank aval. Its operation, use and bank liability to make payment is explained. The due diligence and process of purchasing an avalised bill of exchange on a straight and discount-to-yield basis are described. Primary and secondary forfait is discussed, along with the benefit of a commitment to purchase and the required warranties, representations, and undertakings from the seller in respect of the validity and enforceability of the debt obligation prior to debt purchase.

Keywords

Avalisation Bank aval Commitment to purchase Discount purchase Discount to yield Forfaiting Straight discount Warranties, representations, and undertakings 

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Stephen A. Jones
    • 1
  1. 1.AXS Trade Finance Ltd.Solihull, West MidlandsUK

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