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Commercial Draft Discounting (Redemption)

I. Description
Commercial draft discounting (redemption) is an act in which the redeeming party (the discount applicant) sells its legally held undue commercial drafts with discounted interest to ICBC discounting acceptance institutions which undertake that the redeeming party is entitled to redeem these commercial drafts under the prescribed conditions, and on the redemption date. ICBC discounting acceptance institutions, upon receipt of the payment in full, returns the exact same number of commercial drafts to the redeeming party.

II. Target Customers
High-quality corporate customers with good credit standing, with standardized business management and settling frequently with commercial drafts.

III. Features and Advantages
i. Commercial draft discounting (redemption) is designed to meet the short-term fund shortage of high-quality customers in their fund flow, so that the corporate customers can withdraw funds at any time, and enhance the efficiency of capital utilization;
ii. In this business type, the rights attached to the commercial drafts do not transfer, and the enterprise, after redeeming the commercial drafts, can collect the bill payment by itself, by which extra interest beyond the short-term financing needs is avoided, and the financing costs are minimized;
iii. It enables the customer to control the financing deadline by itself so as to minimize idle funds;
iv. This business type expands the scope of commercial draft-related products. Traditional bill redemption business can only meet the financing needs between financial institutions, while redemption discount of commercial drafts can meet the financing needs of corporate customers;
v. Easy procedures and quick availability of funds highly conform to enterprises’ demands for rapid financing.

IV. Conditions
i. Agreement on Commercial Draft Discounting (Redemption) signed between the parties;
ii. Refer to the Commercial Draft Discounting for further details.

Note: The information on the page is for reference only. Specific businesses are subject to announcements and regulations of local outlets.


Corporate Finance