Overseas Bills Purchased

Overseas Bill Purchased FAQ's

  1. What is an Overseas Bill Purchased?

    An Overseas Bill Purchased is where NAB advances money to a NAB customer that presents NAB with an overseas foreign currency cheque ("Cheque") that is payable by an overseas bank (that is, the Cheque is drawn on an overseas bank). NAB will advance funds in accordance with the Overseas Bill Purchased terms and conditions on the basis that it will be reimbursed by the overseas bank when the Cheque is presented to them.

  2. What options are available for a customer that holds a Cheque?

    NAB customers that hold a Cheque from overseas may ask NAB to either purchase the Cheque from them ("Purchase Option") or send the Cheque to the overseas bank on a collection basis ("Collection Option"). In order to give NAB instructions in respect of either option, the customer must accept the Overseas Bills Purchased terms and conditions. NAB also recommends that customers read our frequently asked questions to understand the associated risks and determine which option is appropriate for their needs.

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  4. What is the Purchase Option?

    This is where NAB agrees to purchase a Cheque from a customer. If requested by the customer, NAB will convert the amount of the Cheque to another currency (such as Australian dollars) using NAB's Airmail Buying exchange rate at the time, and will immediately advance these funds to the customer. This advance is subject to NAB's rights set out in the Overseas Bills Purchased terms and conditions. In general, the Purchase Option is available for Cheques less than the Australian Dollar equivalent of two thousand dollars (AUD2,000).

  5. Why is the Airmail Buying exchange rate used with the Purchase Option?

    As NAB advances funds to the customer before the Cheque is presented to the overseas bank, NAB does not have immediate access to the covering funds of the Cheque. NAB will apply its Airmail Buying exchange rate as it includes a margin to cover the risk of the exchange rates moving during the time between NAB advancing funds to the customer and when NAB eventually receives the funds from the overseas bank.

  6. What if the Cheque is dishonoured (for example, if there isn't enough money in the overseas account or if the signature or other feature of the Cheque is invalid)?

    If NAB advances a customer the value of a Cheque and the Cheque is later dishonoured, NAB may debit the customer's NAB bank account for the amount advanced, any overseas bank charges and NAB's dishonour fee in accordance with the Overseas Bill Purchased terms and conditions. The customer is also liable for any exchange risk (see FAQ 14).

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  8. What is the Collection Option?

    This is where NAB sends the Cheque to the overseas bank for clearance and the funds are paid to NAB. NAB then pays the funds (less any applicable fees) to the customer's NAB account. Cheque clearance may take up to four weeks, depending on the country.

  9. What exchange rate is used with the Collection Option?

    If the customer has requested that NAB convert the overseas currency amount into a different currency (which they may do by requesting NAB to deposit the amount into an account that is in a different currency to the currency of the Cheque), NAB will apply its "Telegraphic Transfer Bank to Buy" exchange rate once NAB has received the funds from the overseas bank.

  10. Are there any additional costs for the Collection Option?

    Yes. Details of NAB's charges are published in NAB's fee brochure. Overseas banks may also charge customers. These charges can be excessive and are outside NAB's control. The customer will remain liable for the full value of the Cheque (and any applicable exchange rate costs), together with any overseas bank charges and any dishonour fees in accordance with the Overseas Bill Purchased terms and conditions, until the Cheque is finally paid.

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  12. What other option is available if NAB does not accept a Cheque under either the Purchase Option or the Collection Option?

    The customer may decide to return the Cheque to the drawer and ask them to send the funds by international Telegraphic Transfer.

  13. If a customer receives funds does this mean the Cheque can't be dishonoured?

    No. Even though funds are released to a customer under the Purchase Option, a Cheque may still be dishonoured as the laws of some countries do not limit the time for paying banks to dishonour overseas bills in certain circumstances.

  14. On what basis may a Cheque be dishonoured?

    The overseas bank on which the Cheque is drawn may dishonour a Cheque for many reasons, including but not limited to scams, the Cheque being fraudulently altered, counterfeit, the funding account being closed, insufficient funds available, the signature being invalid or the Cheque having been stopped.

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  16. What is an example of a Cheque scam?

    An example of a Cheque scam is where a fraudster sends a false Cheque to an innocent victim, asking the victim to cash the Cheque at their bank and send the funds to an overseas bank. The fraudster will take the money before the false Cheque is dishonoured, and the victim is left to carry the cost of dishonour. For more information on scams, the Australian government runs a website to expose scams at: http://www.scamwatch.gov.au

  17. What happens if a Cheque is dishonoured?

    If a Cheque is dishonoured, in accordance with the Overseas Bill Purchased terms and conditions, the customer will remain liable for the funds advanced (and any applicable exchange rate costs), default fees charged by any other bank and by NAB. Amounts may be debited automatically in accordance with those terms and conditions.

  18. What are the exchange rate costs in respect of dishonoured Cheques?

    Where a Cheque is dishonoured, the repayment made by the customer may need to be converted into the currency of the Cheque. If the foreign currency exchange rates have changed, the customer may need to fund the shortfall if the rates have not moved in their favour. Conversely, the customer may gain if the rates have moved in their favour.

  19. What exchange rate is used for a dishonoured Cheque?

    Once NAB receives advice from the overseas bank that a Cheque has been dishonoured, NAB will convert the amount to the currency of the Cheque by applying NAB's Telegraphic Transfer Bank to Sell exchange rate.

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