How to cash dollar Banker's Draft drawn on non-US bank payable to someone else?!

samizdat

OK, a tough one for you guys.

A relative has received a US dollar banker's draft drawn on a Bahamian bank. Since nowadays there is so much suspicion surrounding almost everything, I should say this comes from the proceeds of a property investment in the Bahamas.

This relative is in fact only entitled to part of these funds and the rest must be distributed to other members of the family.

I am keen to follow a moneysaving route here so I'm wondering how to get this money into sterling and the UK banking system as cheaply as possible.

I have a Citibank US dollar account and have previously used an FX broker (Currencies Direct) so my experience is telling me I should get the relative to endorse the Banker's Draft to me, pay this into my personal Citibank account, wait for this to clear (should be quick as it's a Banker's Draft), then arrange a deal with an FX broker to convert the dollar amount (less wire fee) to sterling and issue instructions to the broker to pay sterling BACS to the various beneficiary accounts at UK banks.

Anyone see any issues here? (Assume for these purposes that I can be trusted by my relatives.)

Are Banker's Drafts transferable by endorsement?

Are Currencies Direct still highly rated? Am I right in thinking my only fee should be the US dollar wire transfer from Citibank to the FX broker? (Edit: and the implicit fee in FX spread of course.)

samizdat

samizdat wrote: »

Are Banker's Drafts transferable by endorsement?

Well, it seems from internet research that, in principle, Banker's Drafts are transferable. Indeed, they are negotiable instruments (a broader concept I believe). However, I called Citibank and was told that it would not accept an endorsed Banker's Draft.

The trouble is it's very hard to feel any confidence in Citibank's telephone helpline staff. Please note this is not a racist comment about the nationality or location of the staff, merely a comment about my experience of their level of knowledge and helpfulness. Anyway, this is an unusual question so I was not terribly convinced by "hang on a minute, I'll just ask, ... [10 seconds] ..., no we don't accept them".

Anyway, I wonder if it's worth going to Head Office in Hanover Square and trying it on. Banks at least owe it to us all to get on with the ordinary business of banking, surely?

samizdat

Seems I was right to be suspicious. From section 8 of Citibank's general terms and conditions :

8.3. We may accept a cheque or other payment payable to a third party provided:

8.3.1. it is drawn in a manner acceptable to us, has been endorsed by all necessary parties, and is not payable to a business or limited company;
8.3.2. "Account Payee" or "Not Transferable" does not appear on it;
8.3.3. it is not drawn in favour of the payee "only", and
8.3.4. you tell us in writing the circumstances in which it was endorsed and give us any other requested information.

Well, I haven't seen the Draft but I guess there's a chance it doesn't have any of the forbidden words on it.