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Export Discount

2021-04-30

Introduction

Export bill discounting means that Bank of China (Central and Eastern Europe) Limited Bucharest Branch buys from the exporter the undue usance draft accepted by banks or the undue debt claim honored by banks under the export L/C, or the undue debt claim guaranteed by banks under the documentary collection. If the issuing bank fails to pay at maturity, Bank of China (Central and Eastern Europe) Limited Bucharest Branch has the right of recourse.

Functions

The product aims to meet the short-term financing requirement of exporters under the usance L/C.

Features

1.Acceleration of capital turnover. Get the fund immediately, so that capital turnover can be accelerated and financial pressure can be eased.

2.Simplification of financing procedures. Financing procedures are more convenient when compared with those for working capital loans.

3.Less financial expenses. The customer can choose the funding currency in accordance with the interest rates of different currencies in Bank of China (Central and Eastern Europe) Limited Bucharest Branch, so as to minimize the financial expenses.

Target Customers

1.Exporters have limited working capital, they have to develop business through rapid capital turnover;

2.Exporters encounter temporary difficulty in capital turnover between receipt of acceptance/confirmation/guarantee of payment from foreign banks and collection;

3.Exporters discover investment opportunities between receipt of acceptance/confirmation/guarantee of payment from foreign banks and collection, and the yield is higher than the discount rate.

Application Qualifications

I.Basic qualifications

1.The business license of enterprises legally approved, registered and annually checked and other valid certifications sufficient to prove the legitimacy and scope of its operation;

2.The settlement account with Bank of China (Central and Eastern Europe) Limited Bucharest Branch;

4.The qualification of import and export operation.

II.The customer has the undue draft accepted by banks or the undue debt claim honored by banks, or undue debt claim guaranteed by banks under the documentary collection.

III.Taking up the credit line of the issuing banks.

Process

1.Exporters sign the financing agreement with Bank of China (Central and Eastern Europe) Limited Bucharest Branch, and submit the export documents to Bank of China (Central and Eastern Europe) Limited Bucharest Branch.

2.After approving the documents, Bank of China (Central and Eastern Europe) Limited Bucharest Branch mails them to the foreign bank (the issuing bank or a designated bank) for reimbursement.

3.Upon receipt of the documents, the foreign bank will give the instruction of acceptance.

4.Upon receipt of acceptance order, the customers should submit business application to Bank of China (Central and Eastern Europe) Limited Bucharest Branch, and Bank of China (Central and Eastern Europe) Limited Bucharest Branch effects the payment to the exporter.

5.Foreign bank effects payment at maturity, which Bank of China (Central and Eastern Europe) Limited Bucharest Branch will use it to cover the discount payment.

Kind Reminder

1.Exporters should agree with the importer to take the usance L/C as the settlement instrument in the contract;

2.You should submit the application to Bank of China (Central and Eastern Europe) Limited Bucharest Branch after the issuing bank accepted usance draft or issued acceptance notice;

3.After the usance draft accepted by issuing bank, you might as well choose export bill discounting while encountering the temporary difficulty of capital turnover and having demand for short-term capital financing. After the usance draft accepted by issuing bank, you might as well choose export bill discounting while discovering new investment opportunities and the expected yield is higher than the discount rate;

4.Bank of China (Central and Eastern Europe) Limited Bucharest Branch generally will not provide bill discounting for investment purpose which has no real trade background.

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