Introduction
As a method of finance between financial institutions, commercial draft inter-bank discounting refers to the conduct that a financial institution transfers undue discounted or inter-bank discounted (buy-out) commercial drafts to another financial institution. Inter-bank discounting has two transaction types, Buy-out and Sale-off.
Features
1. Maximize capital returns through finance;
2. Direct effects on credit scale and further on loan-to-deposit ratio;
3. Adjust bad debt provision and indirectly affect stated profit of financial institutions.
Discount Rate
Generated by spread on basis of 3M SHIBOR.
Target Customers
Financial institutions qualified for bill services at all levels, and granted with credit line.
Process
1. The applicant applies for interbank discounting;
2. Qualification examination of the applicant;
3. Examination on commercial drafts;
4. After examination, the applicant and the bank sign an interbank discounting contract;
5. The bank disburses the value of the commercial draft to the applicant with the interest deducted.
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