Inter-bank borrowing and lending

General

Inter-bank RMB borrowing and lending: It refers to the financing without warranty made by financial institutions in the national inter-bank borrowing and lending market (hereinafter referred to as borrowing-lending market for short) as approved by People’s Bank of China through unified inter-bank borrowing and lending network, including electronic transaction system of National Inter-bank Funding Center, borrowing-lending recording system at the branches of People’s Bank of China, and other transaction systems approved by People’s Bank of China.

FCY inter-bank borrowing and lending: It refers to the short-term financing of financial institutions with legal qualification, aiming at balancing surpluses and shortages of funds and maintaining liquidity of financial institutions.

Features

1.Strict restrictions are imposed on institutions entering the market of RMB borrowing and lending. No strict restriction is imposed on the institutions of transaction of FCY inter-bank lending. Such transaction is allowed as long as the lending party has set a credit line for the borrowing party. 2.The financing term is relatively short. 3.It is more advanced in transaction means, simple in procedures and short in transaction time. 4.No warranty or guaranty is needed. It is a kind of credit transaction completely depending on the credit line of the transaction partner. 5.The interest rate may be negotiated by the supply and demand parties to fluctuate in line with market conditions

Conditions for application

RMB inter-bank borrowing and lending: The financial institutions granted with borrowing-lending line by CGB and approved as per CGB’s requirements on risk management, taking Chapter 2 of Measures for the Administration of Inter-bank Borrowing and Lending (Order No. 3 [2007] of the People’s Bank of China) for reference.

FCY inter-bank lending: The financial institutions awarded with FCY borrowing-lending line by CGB and approved as per CGB’s requirements on risk management

Term and interest rate

RMB inter-bank borrowing and lending: maximum term of 360 days; refer to Article 23, Chapter 4, Measures for the Administration of Inter-bank Borrowing and Lending for details.

FCY inter-bank lending: 1 year

RMB inter-bank borrowing and lending: The transaction rate shall be agreed upon by both parties, taking market rate (SHIBOR) for reference.

FCY inter-bank lending: It is determined by both parties, taking London Inter-bank Offered Rate (LIBOR) for reference.

Business Flow

RMB inter-bank borrowing and lending: Take Chapter 3 of Measures for the Administration of Inter-bank Borrowing and Lending (Order No. 3 [2007] of the People’s Bank of China) for reference.

FCY inter-bank lending: See international conventions for reference.

1.Department of Business Demand initiates the application of credit line of the transaction counterpart; 2.Department of Risk Management evaluates and releases the credit line; 3.The customer comes up with transaction demand; 4.RMB inter-bank borrowing and lending will be completed through transaction system of inter-bank borrowing and lending; FCY inter-bank lending may be completed through transaction media, including paper and electronic media, which shall be recognized by both parties and have legal binding force.

Related Financial Instruments

Shanghai Inter-bank Offered Rate (SHIBOR)

London Inter-bank Offered Rate (LIBOR)