Bank drafts, or bills of exchange, is a basic instrument of foreign trade financing that allow exporters to use their banks as collection agents for foreign accounts. The bank forwards the exporter’s invoices to the foreign buyer, either by mail or through a branch or correspondent bank in the buyer’s country. When the buyer pays the draft, the exporter’s bank converses the proceeds of the collection into the exporter’s currency and deposits this money in the exporter’s account. Two kinds of bank drafts include sight drafts and time drafts.