Bank Acceptance Bill Re-discounting

Definition
Funds borrowed by discounting bank (transferor bank) from other banks (transferee bank) by transferring ownership of unmatured and discounted bank acceptance bill. Transferee bank pays to transferor bank the bill amount less discounting interest. 

Service Category
*Credit discounting：other banks borrow funds from Huaxia Bank using unmatured and discounted bank acceptance bill;
Debit discounting: Huaxia Bank borrows funds from other banks using unmatured and discounted bank acceptance bill. 
*Buy-out discounting: once the transfer of unmatured and discounted bank acceptance bill completed, transferee bank is the new creditor of the bill;

Repo discounting: No ownership transferred. Transferor bank buys back the bill on the date agreed between both parties.

Applicable Clients
Financial institutions licensed by PBOC to run bill discounting service.

Service Flow
(I) Credit Discounting
1. Bill holder submits application to Huaxia Bank with documentation supplied; 
2. Go through screening process. Check if the bill is true if the holder does not promise to buy back. Submit for approval once all information given is correct;
3. Huaxia accounting department draws amount against those approved;
4. Close monitor to collect the loan on time.   
(II) Debit Discounting
1. Submit application to the lending bank as required;
2. Submit details to the Huaxia management department for approval;
3. Once approved, Huaxia accounting department endorses the bank acceptance bill and passes to financial planning department;
4. Financial planning department proceeds the application using the bill and the information prepared.

Price
Refer PBOC interest rate. 

Commercial Acceptance bill rediscounting

Definition
Funds borrowed by discounting bank (transferor bank) from other banks (transferee bank) by transferring ownership of unmatured and discounted commercial acceptance bill. Transferee bank pays to transferor bank the bill amount less discounting interest. 

Service Category
Same in Bank Acceptance Bill Re-discounting.

Applicable Clients
Financial institutions licensed by PBOC to run bill discounting service.

Service Flow
(I) Credit discounting
1. Bill holder submits application to Huaxia Bank, together with the commercial acceptance bill to be discounted, enquiry record, photocopy of commodity trading contract or value-added tax invoice;
2. Go through screening process. Check if the bill is true if the holder does not promise to buy back. Submit for approval once all information given is correct;
3. Huaxia accounting department draws amount against those approved;
4. Close monitor to collect the loan on time.
(II) Debit discounting;
1. Submit application to the lending bank as required;
2. Submit details to the Huaxia management department for approval;
3. Once approved, Huaxia accounting department endorses the commercial acceptance bill and passes to financial planning department;
4. Financial planning department proceeds the application using the bill and the information prepared.

Price
Refer PBOC interest rate

Bill Repurchase

Definition
Cash receiver (repo party) borrows money from the cash provider (reverse party) using the discounted bill held on hand. Borrower still owns the legal title to the bill. Lender pays the face amount less interest, based on the buy-back term and price. At maturity, borrower buys back the bill at face value. In fact this is a short-term borrowing using the bill as pledge. Huaxia bank can both be the repo party and reverse party, depending on the situation.

Service Flow
(I) Huaxia Bank as the reverse party
1. Borrowing banks/financial institutions apply to Huaxia Bank supported by the original of the bill and required documentation;
2. Go through Huaxia screening process. Against those approved, original of the bill will be checked against veracity and validity by Huaxia accounting department. Huaxia Bank signs Repurchase Deed with the applicant, prepares all necessary vouchers and proceeds to transfer funds;
3. At maturity, the applicant (repo party) credits the repo amount (face value of the bill) to the
specified Huaxia account. Huaxia Bank returns the bill to the applicant once the amount is received. 
(II) Huaxia Bank as the repo party: follow the instructions of the other party (reverse party) to apply.

Price
Negotiate between both parties.