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I. Description
Commercial draft buy-and-resell (repurchase) consists of buy-and-resell and sell-and-rebuy of commercial drafts.
Commercial draft buy-and-resell (repurchase) refers to the financing act of ICBC Bills Discounting Department (buyer and reseller) buying discounted or rediscounted undue commercial drafts held by other financial institutions (seller and rebuyer) in a form without changing the bill owner, the buyer and reseller making payment to the seller and rebuyer according to the par value and the mutually agreed repurchase term and price after deduction of interest, and upon maturity, the seller and rebuyer repurchasing the commercial drafts from the ICBC Bills Discounting Department as per the par value.
Commercial draft sell-and-rebuy (repurchase) refers to the financing act of ICBC Bills Discounting Department (seller and rebuyer) selling its discounted or rediscounted undue commercial drafts to other financial institution (buyer and reseller) in a form without changing the bill owner, the buyer and reseller making payment to the ICBC Bills Discounting Department according to the par value and the mutually agreed repurchase term and price after deduction of interest, and upon maturity, the ICBC Bills Discounting Department repurchasing the commercial drafts from the buyer and reseller as per the par value.
II. Target Customers
Financial institutions with the bill business qualifications and eligible for interbank business. The commercial drafts involved in ICBC’s repurchase business are limited to bank acceptance bill.
III. Features and Advantages
i. This business type allows financial institutions to adjust capital surplus and deficiency, enhance the asset liquidity and simultaneously maintain asset returns;
ii. The flexible term facilitates short-term financing of financial institutions, avoiding extra interest beyond the short-term financing needs, and minimizing idle funds;
iii. It can evade the interest rate risk and guarantee capital gains;
iv. Easy procedures and quick availability of funds highly conform to financial institutions’ demands for rapid financing.
IV. Conditions
Refer to Commercial Draft Rediscounting.
Note: The information on the page is for reference only. Specific businesses are subject to announcements and regulations of local outlets.
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