From: John Boyle 
Newsgroups: uk.finance
Subject: Re: Foreign Cheques
Date: Wed, 20 Jun 2007 23:43:37 +0100
Bytes: 2572

In message , Aaron B 
 writes
>How do banks go about processing foreign cheques today and how was it done
>in the days of yore?  Say my Burmese friend paid me from some Burmese
>bank...

Same now as they used to.

There are two ways, but both involve the same mechanism.

The first is 'negotiation', but a Burmese cheque aint going to be 
negotiated. Basically this involves the bank giving you the dosh now but 
taking it back later if it bounces.

The second is 'collected' : This involves you getting no money unless 
your bank gets it, as follows :-

Assuming the cheque is drawn in Kyats (K):-

Your bank (A) sends the cheque to its Head Office (E) who sends it to 
its correspondent bank in Burma (B) (possibly without inter bank entry).

B sends it to the HO of the drawee bank in Burma (C).

C sends it to the branch upon which it is drawn (D)

If D decides to pay the cheque then it send the Ks to C

C then sends the Ks to the account it holds with B and tells B that in 
two days time is must transfer the Ks from C's account to E's account 
with B.

At the same time C sends a message to E that in two days time it will 
perform a contemporaneous contra transaction on its account at its 
branch in UK (F) in which C will converts the Ks to £s at F's rate of 
exchange and then transfer that numbers of £s from its account at F into 
E's account at the same bank.

F will then send the £s to A.

A will then credit your account.

Time scale?  abut 2.5 years.
-- 
John Boyle