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International Trade Finance

Date: 2016-04-19

Issuing of L/C with Credit Limits

Description

Issuing of L/C with credit limits refers to the business that PSBC issues the letter of credit to a customer without charging the guarantee deposit in full amount from it.

Functions 

It is used to satisfy the importers’ short-term financing demand under the import L/C.

Features

Reducing the tied-up fund and accelerating the fund turnover, so as to improve the efficiency and benefit of fund use.

Fees

Handling fee for issuing of the L/C

Applicable customers

Exporters who do not have sufficient working capitals or have other investment opportunities, and hope to be exempted from all or part of the guarantee deposit for the issuance of L/C.

Conditions for application

1. Any applicant who was registered upon the approval according to the law, and holds the legal-person business license subject to annual inspection or other effective evidences sufficient to prove the validity of its operation and business scope;

2. Any applicant who has the loan card;

3. Any applicant who has the permit for account opening and has opened a settlement account with the Bank;

4. Any applicant who has the qualification of import and export operation; and

5. Any applicant who has the line of credit in the Bank. 

Business flow

1. Upon the request of the importer, the Bank verifies the line of credit that can  be used in circulation for the importer based on its solvency, performance records, guarantee conditions and other information  and controls the balance of the line of credit, whereby the importer exempt from paying all or part of the guarantee deposit for the issuance of L/C. If the importer fails to obtain the line of credit in advance, the line of credit to a single transaction may be granted; 

2. The Bank, after accepting the application for issuing of the L/C from the importer, occupies the line of credit (single line of credit) and issues the L/C;

3. Upon receipt of the documentations of L/C submitted by the exporter, the Bank, after checking and confirming there is no errors, deducts the amount from the importer and makes the payment, as well as repays the line of credit.

 

 

Import Bill Advance

Description

Import bill advance refers to the short-term financing that PSBC makes advance payment on behalf of the importer with valid certifications and commercial bills under the import L/C or the import consignment collection.

Functions 

It is used to satisfy the importers’ short-term  financing demand under the import L/C or the import consignment collection. Import bill advance is classified into import L/C bill advance and import collection bill advance according to the settlement methods, foreign currency import bill advance and RMB import bill advance according to the types of bill advance currency, and self-owned funds advance payment and overseas affiliated bank advance payment (import bill advance by overseas institution) according to the sources of advance payment.

Features

1. Reducing the tied-up fund. Importers can import and resell commodities at home with bank funds, complete the trading and make profits without occupying any working capital;

2. Grasping the market opportunities. The product can help importers in obtaining documentations of title to goods, picking up and reselling goods in the case that payment for goods could not be made immediately, thereby grasping the market opportunity;

3. Enhancing the bargaining ability. The product can help importers in enhancing their bargaining ability when dealing with exporters by converting the payment at usance into payment at sight, or correspondingly shortening the duration of forward payment;

4. Cutting down the financial cost. Importers can choose the type of funding currency based on the interest rates of different currencies, so as to reduce financial cost.

Interest rate

Financing interest rate shall be subject to the authorization of the Bank for interest rate on trade finance.

Applicable customers

1. Any importer who cannot execute documents against payment timely due to temporary difficulty in capital turnover;

2. Any importer who gets a new investment opportunity before making payment, and the expected yield is higher than the interest rate on bill advance.

Conditions for application

1. Any applicant who was registered upon the approval according to the law, and holds the legal-person business license subject to annual inspection or other effective evidences sufficient to prove the validity of its operation and business scope;

2. Any applicant who has the loan card;

3. Any applicant who has the permit for account opening and has opened a settlement account with the Bank;

4. Any applicant who has the qualification of export operation.

 

 

Import Bill Advance By Overseas Institution

Description

Import bill advance by overseas institution refers to the short-term financing provided by the Bank, according to the agreement with other banking peers (hereinafter referred to as "domestic peers”), advance payables of domestic peers under the documentary L/C or documentary collection before the due date

Features

The product can meet the demand of domestic correspondent banks or domestic peers for low-cost overseas fund.

Interest rate

Financing interest rate on the product shall be subject to the interest rate quoted by the overseas institution concerned.

Applicable customers

1. Any exporter who hopes to obtain the payment at sight, but the importer and the importer’s bank hopes to make the payment at usance and obtain the financing.

2. Domestic financial cost is higher than that of the country or region where the exporter is located.

Conditions for application

Any overseas institution that handles the overseas agency payment for domestic peer, and that domestic peer holds the line of credit for financial institution in the Bank.

 

 

Packing Loan

Description

Packing loan refers to a special loan issued by the Bank upon the request of the beneficiary of L/C (exporter) to finance its purchase, production and shipment.

Functions 

1. It is used to satisfy the exporters' requirements of short-term financing demand for goods preparation and shipment under L/C.

2. The repayment comes from foreign exchange earnings from export under L/C with conditional credit guarantee by the issuing bank.

3. It is the special loan with a clear trade background, and the closed management is applicable to the product.

Features

1. Increasing the trade opportunities. The product can help exporters to run business smoothly and grasp trade opportunities in the event of shortage of capital and failure to obtain the advance payment of goods.

2. Reducing the tied-up fund. The product can alleviate pressure of exports for working capital because exporters’ own capital will not be occupied during lead time for purchase, production and so on.

Interest rate

Financing interest rate shall be subject to the authorization of the Bank for interest rate on trade finance.

Applicable customers

Any exporter who is in shortage of working capital, and the overseas importer disagrees with payment in advance but agrees to open a L/C.

Conditions for application

1. Any applicant who was registered upon the approval according to the law, and holds the legal-person business license subject to annual inspection or other effective evidences sufficient to prove the validity of its operation and business scope;

2. Any applicant who has the loan card;

3. Any application who has the permit for account opening and has opened a settlement account with the Bank;

4. Any applicant who has the qualification of import and export operation;

5. Any applicant who has the credit line in the Bank. 

Documents required 

1. Written application;

2. Overseas sales contract and domestic purchase contract;

3. Trade statement;

4. Original copy of L/C.