Bank Acceptance Bill Re-discounting
Funds borrowed by discounting bank (transferor bank) from other banks (transferee bank) by transferring ownership of unmatured and discounted bank acceptance bill. Transferee bank pays to transferor bank the bill amount less discounting interest.
*Credit discounting：other banks borrow funds from «First Sino Bank» using unmatured and discounted bank acceptance bill;
Debit discounting: «First Sino Bank» borrows funds from other banks using unmatured and discounted bank acceptance bill.
*Buy-out discounting: once the transfer of unmatured and discounted bank acceptance bill completed, transferee bank is the new creditor of the bill;
Repo discounting: No ownership transferred. Transferor bank buys back the bill on the date agreed between both parties.
Financial institutions licensed by PBOC to run bill discounting service.
(I) Credit Discounting
1. Bill holder submits application to «First Sino Bank» with documentation supplied;
2. Go through screening process. Check if the bill is true if the holder does not promise to buy back. Submit for approval once all information given is correct;
3. «First Sino Bank» accounting department draws amount against those approved;
4. Close monitor to collect the loan on time.
(II) Debit Discounting
1. Submit application to the lending bank as required;
2. Submit details to the «First Sino Bank» management department for approval;
3. Once approved, «First Sino Bank» accounting department endorses the bank acceptance bill and passes to financial planning department;
4. Financial planning department proceeds the application using the bill and the information prepared.
Refer PBOC interest rate.