Introduction
Electronic Commercial Draft Discounting refers to a financing activity where bearers of electronic commercial drafts pay a certain amount of interest to transfer commercial draft rights to financial institutions via the Electronic Commercial Draft System of the People's Bank of China before the due date of the drafts, in order to obtain funds. It is also a method by which financial institutions provide funds to the bearers of drafts. The most distinctive characteristic lies in the fact that discounting application and endorsing transfer are performed in the form of electronic messages using network and computer technology.
Features
1. Increase corporate financing channels and reduce corporate financing costs;
2. Improve asset liquidity of enterprises, speed up fund turnover, and enhance fund utilization efficiency and asset turnover of customers;
3. Increase enterprise cash flow, lower asset-liability ratio for customers and improve capital adequacy ratio;
4. Save financial costs of enterprises and avoid fund overstocking;
5. Eliminate risk of false drafts incidental to traditional paper commercial drafts;
6. Reduce trading costs and improve payment efficiency due to shortening the time of drafts and funds on the way.
Discount Rate
Generated by spread on basis of 3M SHIBOR.
Term
The maximum term is one year.
Target Customers
Corporations and legal organizations with demands for short-term financing.
Application Qualifications
1. Customers should be enterprises or other organizations legally registered within the territory of the People's Republic of China and hold valid loan cards;
2. Customers could prove that they have legally acquired the drafts and possess real relationship of transactions;
3. Customers have deposit accounts with the bank;
4. Customers possess real relationship of transactions and credit and debt with drawers or prior holders.
Required Documents
1. The first page of discounting voucher, sealed by the same as the specimen stamp of the applicant in the bank (as a substitute for discounting application);
2. When applying for discounting, customers should provide the receiver with the contracts, invoices and other documents that can prove real relationship of transactions or credit and debt with prior holders;
3. Electronic commercial draft discounting application to the discounting bank via the Electronic Commercial Draft System of the People's Bank of China.
Process
1. After a discounting application is put forward by the Electronic Commercial Draft System of the People's Bank of China, the financial services representative will verify qualifications and transaction relationship documents of the discounting applicant; financial services representatives, commercial banking associates and credit counselors will fill in business information, examination opinions on transaction relationship documents and business examination and approval opinions in the business examination and approval form respectively. They will sign and seal the examination and approval form, so as to be filed for future reference;
2. The bill financing department and the applicant sign an electronic commercial draft financing contract;
3. The checker checks up on the corresponding information in the system;
4. The bill financing department funds to the account of the discounting applicant, and files those related discounting documents.
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