Inter-bank bill discounting

Service Description

Inter-bank bill discounting refers to the act involving negotiable bills in which a financial institution transfers the premature discounted commercial bills to another financial institution in the form of discounting. It is a short-term financing way between financial institutions. Inter-bank discounting of commercial bill is divided into outright type and repo type.

Outright inter-bank discounting of commercial bills refers to the act in which a financial institution transfers the premature commercial bills that it legally obtains with real transaction relation to CGB and CGB pays a sum of money for the bills to the financial institution after deducting the discount interest.

Repurchased inter-bank discounting of commercial bills refers to the act in which the premature commercial bills with real transaction relation that are legally obtained by a financial institution are purchased in a limited period, and the bill holder repurchases such bills at mutually agreed time, at agreed price, and in agreed manner.

Features

1.        The size and structure of a bank¡¯s assets operation can be regulated.

2.        Capital efficiency can be improved.

Applicable To

Financial institutions that are authorized by the People¡¯s Bank of China to deal with bill discounting products

Handling Procedure

1.        Submittal of application and inter-bank discounting information by the counterparty;

2.        CGB reviews and approves the commercial bills and materials about inter-bank discounting.

3.        Entering inter-bank discounting agreement after passing of internal review;

4.        Payment of capital to the counterparty¡¯s bank after deduction of repo interest;

5.        Handover of bill upon receipt of repo capital on the maturity date for repo-type inter-bank bill discounting.