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Legal Person Account Overdraft


 

Introduction

Legal Person Account Overdraft is a new type of corporate credit product developed by our bank catering for the increasing demand of the key customers for cash management, transaction cost reduction and corporate financial management enhancement. According to customers' application, our bank, based on the check and ratification of account overdraft limit, within the given period, allows customers to overdraw the amount within the checked and ratified overdraft limit when their account deposit falls short of payment, so as to offer provisional credit facilities to meet normal settlement needs.

Category

In terms of account type, RMB Legal Person Account Overdraft can be classified into basic account overdraft and general account overdraft.

Features

1. Reasonable capital operation;

2. Simple and convenient loan procedure, short period for evaluation and approval;

3. Broader financial service channels for debtors.

4. Differences between Legal Person Account Overdraft and loans

Item Legal Person Account Overdraft Loans
Purpose of Design Convenience of payment Financing
Debtor
Qualification
Customers above BBB level; customers below BBB level are required to give the reasons for bank acceptance Compliance with Lending General Provisions
Contract Reference contract Model contract
Loan Terms
(interest rate, term)
Separate negotiations with debtors: interest rates may vary, which the up limit is +30%, and the down limit is -10% (no downward float in principle, or it has to be subject to relevant provisions); the maximun term can be not exceed one year In accordance with relevant provisions of the bank
Loan
Use
First borrowing, first repayment, borrowing and repayment at any time. Loans shall be circularly used within the approved amount in the contract. As stipulated in the contract, loans can be used at separate times, for some key customers, loans can be circularly used in certain cases.
Accounting Accounted in the accounting system, not shown in the credit registration system of the People's Bank of China. Accounted in the credit system, shown in the credit registration system of the People's Bank of China.
Loan
Management
Post-lending management measures should be strictly abided, with focus of monitoring on capital flow direction. Conducted according to post-lending management measures
Interest  & Charges
Collection
Interest collected according to actual amount and date; collecting commitment fee which is less than 0.5% of corporate overdraft amount Interest collected according to the provisions agreed with debtors and the actual use of loans

Currency Type

The currency types of Legal Person Account Overdraft transaction include RMB, USD, EUR, HKD, JPY and GBP.

Interest Rate & Charge

The interest rate of Legal Person Account Overdraft is set according to relevant provisions of interest rate management of the People's Bank of China, and the specific overdraft interest rate and overdraft commitment fee shall be determined through the contract between two parties.

Target Customers

1. Domestic enterprise legal persons established with the approval of industry competent authorities, registered with the industrial and commercial administrative authorities, obtained business license and passed annual inspection;

2. Large business scale, favorable operation results, strong market influence, and promising market prospect;

3. Good reputation, without any negative financial credit record;

4. Acquisition of valid loan card/certificate from the local People's Bank of China;

5. The use of overdraft capital conforms to national industrial policy and relevant legislations;

6. Sound business management organization, qualified management and rigorous business management system;

7. Corporates with credit rating above BBB (BBB included) according to the assessment of Bank of China, favorable operational, financial and credit status and the capacity to repay the principal and interest of the loans; any customers with credit rating below BBB should provide reasonable reasons that resulted in low credit rating;

8. Implementing acceptable guarantee method;

9. Opening basic deposit accounts or general deposit accounts, and having had deposit and settlement business in our bank with amount at least equivalent to that of loans;

10. Customers are not involved in ongoing lawsuits;

11. Implementing other loan terms prescribed by the bank.

Required Documents

1. Loan application, clearly listing the general situation of the corporate, overdraft amount limit, currency type, term, use, source of overdraft repayment, guarantee, repayment plan, etc., concerning the application of Legal Person Account Overdraft business;

2. Business license of enterprise legal person, certificate of legal person code, loan card/certificate that passed annual examination;

3. Articles of Association and/or joint venture (associate) agreement;

4. Certificate of Legal Representative and/or Power of Attorney;

5. Resume of the chief executive (financial director included);

6. Board Resolution and Letter of Authorization related to the approval of Legal Person Account Overdraft business, and board specimen signatures;

7. Audited financial statements for the recent three years and the most recent month, or certification of registered capital verification of newly-established enterprise;

8. Deposit account opening details, including opening bank, account number, balance, account settlement transaction and settlement amount, etc.;

9. Primary liabilities and contingent liabilities status and statement;

10. Bank credit rating materials in the past and relevant certifications;

11. Guarantee materials, including guarantor's guarantee commitment letter, background materials, financial statements for recent three years, and list of mortgage (pledge), value assessment documents and ownership certificate, insurance documents or commitment letter of approving insurance transfer;

12. Other materials required by our bank.

Application Procedures

1. Customers provide the above-mentioned materials to relevant branches of our bank which are qualified to conduct Legal Person Account Overdraft business;

2. Relevant handling departments of our bank shall make preliminary investigations on the authenticity, compliance and accuracy of the materials;

3. If the materials conform to the preliminary investigation qualification of Legal Person Account Overdraft business, our bank will proceed with internal assessment procedure; otherwise our bank will send timely reply and return relevant materials;

4. Upon the approval of our assessment, the transaction shall be officially conducted by the handling department;

5. When customers apply for another Legal Person Account Overdraft, if the above-listed materials have been submitted and no changes occur, resubmission may be exempted.

Process

1. Debtors hand in the application of Legal Person Account Overdraft and relevant materials;

2. The bank makes preliminary investigation on debtors' applications. If qualified, the bank shall make risk assessment. For those which passed the assessment, our bank will send written notifications to debtors;

3. The bank drafts legal documents including Legal Person Account Overdraft Contract, Contract of Guarantee (if any), Mortgage (Pledge) Contract (if any), etc., and discusses contract terms with debtors. The two parties sign the above legal documents through mutual consultation and agreement. If foreign currency is involved, customers shall go through the formalities of "Domestic foreign exchange loan registration" in the State Administration of Foreign Exchange;

4. The bank shall continually monitor the overdraft capital of debtors' legal person account until the termination of the contract.

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