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Risk Participation


Risk participation means that Bank of China, as a risk participating bank, bears parts or all of the credit risks of the obligor under international settlement and trade finance, on a funded or unfunded basis. Risk participation is an important product to strengthen cooperation.

According to whether Bank of China provides funding, we have funded risk participation and unfunded risk participation.

Funded risk participation means that Bank of China funds the deal in risk participation; unfunded risk participation means that Bank of China does not provide funding, but in case obligor fails to fulfill payment obligations at maturity, Bank of China shall make corresponding payments for creditor's rights in accordance with its pro rata share.


1.Solution to the problem of lack of credit line;

2.Reduction of risk assets, optimization of asset portfolio, and satisfaction of BASEL II requirements for minimum capital;

3.Assistance in expanding business in Chinese market;

4.Improvement of risk coverage capacity;

5.Maintenance of a good relationship between you and your obligor through the undisclosed risk participation.


The main expense is funding interest. Funding interest rate adopts the form of base interest rate plus margin, which depends on multiple factors such as country risk, credit risk and funding term. Expense of unfunded risk participation business mainly is participation fees.

Scope of Application


2.Letter of credit, T/T remittance, D/A collection and reimbursement under the domestic L/C;

3.L/C Confirmation;

4.Guarantee reissurance;

5.Export credit insurance financing;

6.Bank acceptance draft discounting;

7.Other risk participation business.


1.Your bank sign a Master Risk Participation Agreement with Bank of China;

2.After inquiry, you provide underlying business information such as obligor's name, the amount of creditors' rights and maturity date;

3.Bank of China provides the quoted price of intent and other risk participation conditions;

4.Based on your acceptance of the quoted price, both sides will sign an offer letter, and your bank provides relevant certified documents;

5.Under funded risk participation, Bank of China pays after reception of certified documents; under the unfunded risk participation, you pay participation fees in accordance with agreement requirements.

6.At maturity, under funded risk participation, after receiving payment from obligor, you should immediately make corresponding payments in the light of pro rata share to Bank of China; under the unfunded risk participation, if obligor fails to pay at maturity, you can claim reimbursement from Bank of China within the prescribed time limit.

Required Documents (funded L/C reimbursement for example)

1.L/C and its revised copy;

2.Funding reimbursement authorization via authenticated SWIFT message sent to the reimbursing bank by the issuing bank;

3.Confirmation via authenticated SWIFT message of funding reimbursement and payment advice sent to the issuing bank by the reimbursing bank.

Kind Reminder

1.Usually both sides should sign a Master Risk Participation Agreement. But it is also possible to carry out business cooperation by signing a transactional agreement case by case.

2.At the beginning of business operation, Bank of China can provide an overall consulting service, designing a personalized funding scheme for your bank, and can promise to undertake risk participation on the basis of established prices and conditions within a certain period of time in the future. In such case, you may need to pay certain commitment fees, based on the length of commitment period.

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