Collection account is a special kind of account designed to receive payments. Therefore, any seller or anybody that gets any kind of loan from the market operator is required to have a collection account. Sales on our marketplaces go into people’s collection account. If the account holder is not a seller of anything and they have a collection account, it is because they are borrowing from the market operator, and the collection account is therefore used as the medium of collecting the payment of their facility without any manual intervention.
Because anybody that owes the market operator anything, or anybody that in the ordinary course of business is required to repay an advance in market warrants, must receive all their commercial payments into their collection account. When the collection account is overdrawn, payments received into it wipe out the loan and retire outstanding market warrants. For tenured loans, retiring of outstanding warrants by wiping out the outstanding debit in the beneficiary account doesn’t start until the facility’s tenure has expired.
The peculiarity about collection accounts is that it can never be in the credit. If a collection account goes into the credit, an account—normally the payment account of the owner of that collection account—receives that credit balance into it. So a collection account either has a debit balance or a zero balance, because the net credit flows into another account, which is the payment account.
You have used the word “dormant” wrongly.
No credit not debit goes into a dormant account. That’s what that word means.
What you appear to be calling dormant is that it is retaining credits within itself and not passing them on to the coupled payment account.
It is recovering the overdraft.
That doesn’t amount to being dormant.
Please reword it.
True sir. Actually at the time I did this (like 2 or 3 years ago) I was under the impression that nothing goes into the Collection Account when we are not in blocking mode. That is, it is completely by-passed. That’s why I used “dormant”. I have now changed it.
We did indeed pass through that variant.
We later improved it to have something consistent, since anybody can get a credit facility at any time.
But we also said that if somebody sells nothing and borrows nothing, then he doesn’t need to have or use collection account. But in a world of universal access to CLOSED SYSTEM CREDIT, that option becomes academic. Abi?
