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Entrusted Loan

I. Introduction
The entrusted loan is defined as a loan where ICBC acts as an agent of entrusted funds from the "Principal" (government departments, enterprises/public institutions or individuals). The entrusted funds are administered by ICBC according to target borrowers, purpose, amount, term and rate. ICBC only collects the handling charges and will not undertake any loan risk.

II. Category and Functions
1. Classified into RMB entrusted loan and FX entrusted loan in terms of currency;
2. Apply at the ICBC Counter or through Internet Banking;
3. Released to principal and borrower in different cities, if necessary;
4. One option for Group Company to allocate funds to their subsidiaries.

Companies may use entrusted loans to raise funds in between or allocate internal funds inside the group. Through managing the limit of their branches' accounts, parent company can utilize the funds at minimum cost, maintain or increase the value of the funds.

III. Features
Entrusted loans administrated by ICBC are standard, flexible, easy steps, fast processing and reasonable fee. The entrusted bank can assist in the following at the instruction of the principal:
1. Monitoring in the use of loan and the project execution;
2. Monitoring in the performance of the borrowers and guarantees;
3. Safekeeping of the mortgage, pledge and document of title stated in the Contract;
4. Collection of loan principal and interest on behalf of the principal;
5. Deduction or payment of interest tax;
6. Any other business commissioned by the principal.

IV. Target Clients
Principals can be government departments, enterprises/public institutions, other economic entities and natural persons. Borrowers may be enterprises/public institutions, other economic entities and individual business proprietors.

V. Steps
1. Principal applies for the services to ICBC.
2. The administering ICBC branch checks the source of entrusted funds, loan purpose and repayment source.
3. Principal and ICBC sign the Fiduciary Agreement. Necessary procedures have to completed for FX entrusted loans based on its source of funds.
4. Principal, ICBC and borrower sign the Entrusted Loan Contract once the target borrower is confirmed by the principal. The entrusted bank and borrower sign the guarantee contract if the principal requests mortgage or guarantee.
5. ICBC releases the loan once entrusted funds in place.
6. Administration of the entrusted loan in the later stage. ICBC offers assistance to monitor/manage the entrusted loan on behalf of the client and collects the loan principal and interest.

VI. Notes to Customers
1. Items required for new application by the principal:
(1) Documents verifying the principal's identity (government departments: official letters; industrial and commercial enterprises: business license, tax registration certificate and proof of annual inspection; principal's own ID card or other legal identity document).
(2) Principal's seal and sample of authorized signature.
(3) Proof of the source of the entrusted funds within principal's own discretion.
(4) Other documentation required by ICBC.

2. Items required for new application by the borrower:
(1) Documents verifying the borrower's identity (industrial and commercial enterprises: business license, tax registration certificate and proof of annual inspection; government enterprises: corporate registration certificate, business license and proof of annual inspection).
(2) Loan card.
(3) Accounting reports.
(4) Other documents stipulated by the principal.

Corporate Finance