Introduction

In accordance with the agreement previously signed with the domestic branches/the Global Trade Services Department of the Head Office of the Bank of China (hereinafter referred to as "domestic branches") or other Chinese banks on the Chinese mainland (hereinafter referred to as "Chinese correspondent banks"), the overseas branches/companies of the Bank of China (hereinafter referred to as "overseas institutions") shall advance the amount payable on the due date under the documentary letter of credit or documentary collection and provide short-term finance for the domestic branches and correspondent Chinese banks.

Features

Meeting the demand of the low-cost overseas funds for domestic branches or correspondent Chinese banks.

Interest Rate

The financing interest rate of import bill advance by overseas institutions shall be calculated on the basis of the quotations of interest rate offered by correlative overseas institutions.

Target Customers

1. Exporters wish to obtain payment at sight, whereas importers and their banks expect forward payment and financing.

2. Fund cost in China is higher than that in those countries or areas where the exporters are situated.

Application Qualifications

The correspondent Chinese banks should have the credit line in Bank of China.

Process

I. Process of handling the business between overseas institutions and domestic branches

1. Overseas institutions shall sign the Agreement on Import Bill Advance by Overseas Institutions with domestic branches;

2. In line with the agreement, domestic braches shall make an application to the overseas institutions and send out the duplicate of L/C or the copy of covering letter of collection to the overseas institutions;

3. Domestic branches shall clarify the payment responsibility as well as date of payment and payment duration through tested telex upon receipt of L/C compliance documents or letter of promise of payment/ acceptance draft from customers and agree to handle the import bill advance;

4. Overseas institutions shall make the payment under the instructions of domestic branches;

5. The domestic branches shall pay back to the overseas institutions on the basis of the agreement at maturity.

II. Process of handling the business between overseas institutions and correspondent Chinese banks

1. Overseas institutions shall sign an Agreement on Import Bill Advance by Overseas Institutions with correspondent Chinese banks;

2. Correspondent Chinese banks shall clarify the payment responsibility as well as the date of payment and payment duration via tested telex to the overseas institutions;

3. Overseas institutions shall make the payment under instructions from correspondent Chinese banks;

4. The correspondent Chinese banks shall pay back to the overseas institutions based on the agreement on the maturity date.