trade financing

banking business

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Trade financing is one of the businesses of banks. Refers to the bank's response to the importer or exporter Supplied and import and export Trade settlement dependent Short term financing Or credit facilities. Overseas trade financing business refers to the business of Import L/C issuance When doing business, use foreign countries Correspondent bank The amount and conditions of financing provided and the extension of the payment term under the letter of credit Financing mode 。

Trade financing refers to Commodity trading Medium, banks use structural short-term Financing instruments , based on inventories in commodity transactions (such as crude oil, metals, grains, etc.) advance charge 、 Accounts receivable And other assets. Borrowers in trade finance, except Commodity sales revenue There is no other source of repayment Production and operation activities , on Balance Sheet There are no real assets and no independent repayment capability. Trade financing factoring provided by None Right of recourse With convenient and simple procedures, it basically solves the problem of exporters Credit sales And occupied in transit Short term funds Question.

Chinese name: trade financing
Foreign name: trade financing

service provider: bank
service object: importer or exporter

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Expression mode

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Minsheng launched three new products of trade financing

(I) Import documentary bills 。 Means Issuing bank After receiving the documents under the L/C and reviewing them without error Documentary bill Agreement and documents submitted by the applicant Trust Receipt , make external payment and release documents first. Applicant Pick up goods by voucher And return the principal and interest of bill purchase to the issuing bank after market sale.

(II) Overdraft within limit 。 It refers to the bank's Credit And mortgage (pledge) and guarantee, to check and approve an overdraft limit for customers in their bank current accounts, allowing customers to Fund demand Overdraft within the limit and can be used sales revenue automatic Offset Overdraft balance.

(III) Import payment 。 Means Issuing bank According to the financing agreement signed with foreign banks (mostly their overseas branches), the Agency Payment Agreement under Import Letters of Credit was signed with the applicant before the letter of credit was opened《 Trust Receipt 》Release orders, Telegram Payment by foreign bank. The applicant is paying on behalf due date Pay the principal and interest paid on behalf.

(IV) Fake usance letter of credit 。 It means that the stipulated draft issued by the issuing bank is usance/ Paying bank Pay at sight and the discount fee is borne by the applicant Financing mode 。

(V) Collection Bill Purchased 。 Refers to the adoption of Delegated Collection Settlement Method After the exporter of Collections Return upon receipt Bank advances Financing methods.

(VI) Export factoring and bill purchase 。 It means that the exporter Import factoring Credit line After that, deliver the goods and submit the invoice and relevant documents export factor When (a bank) collects money on its behalf, the bank advance charge In this way, it can provide a financing method that does not exceed 80% of the invoice amount.

(VII) Import Collection Bill Purchase 。 Means Collecting bank After receiving the full set of collection documents sent by the exporter through the remitting bank Trust Receipt As well as the Import Collection and Bill Purchase Agreement signed between the collecting bank and the importer, the importer shall first make external payment and release the documents, pick up the goods against the documents, and return the principal and interest of the bill purchase to the collecting bank with the payment after sales.

service mode

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Credit issuing

It means that the bank provides customers with Credit line Internal relief bond Open letters of credit with foreign parties.

Import documentary bills

Means Issuing bank On receipt of a full set of matching documents under the L/C L/C payment Short term of Financing 。

Import documentary bills Usually Trust Receipt Used together. The issuing bank shall release the documents under the letter of credit to the applicant against the trust receipt issued by the applicant to the bank. The applicant shall first handle the picking up, customs declaration, warehousing, insurance and sales without payment, and pay the amount of the letter of credit and related interest paid by the bank for him with the funds withdrawn after the sales of goods.

Shipping Guarantee

Refers to L/C settlement Of import trade Where the goods arrive at the destination before the shipping documents, Issuing bank At the request of the importer, a guarantee document issued by the importer to the carrier or its agent to bear the liability for compensation arising from the advance delivery of goods.

Bill purchase business

It means that the beneficiary of the letter of credit pledges a full set of shipping documents to the local bank after the goods are shipped, which deducts the interest and Relevant expenses After that, pay for goods Advance payment To beneficiaries, and then to Issuing bank A trade financing business in which claims are made to recover payment for goods.

Packaged loan

Means exporter After receiving the valid letter of credit opened by the bank where the importer is located but not negotiated, apply to the bank with the original letter of credit, so as to obtain the short-term required for the production, purchase and shipment of export commodities under the letter of credit RMB turnover Financing 。

Foreign exchange discount

It refers to that the bank, before the maturity of foreign exchange bills Face amount Middle deduction Discount interest Then, pay the balance to Foreign exchange bill Ticket holder.

international factoring

It refers to international trade D/A In the case of credit sale, the bank or export factoring agent Correspondent bank Or the import factor gives up with conditions Right of recourse For exporters Accounts receivable To approve and purchase, so that the exporter can get the guarantee to recover the payment after export.

Forfeiting

Also called bill package or bill buyout, it refers to the long-term held by the exporter in the way of deferred payment of international trade by the bank or package buyer Acceptance bill or Promissory note Go No Right of recourse Discount (i.e. buyout).

Buyer's credit

It refers to the granting of medium and long-term credit to foreign borrowers, which is used by importers to pay for goods of Chinese exporters and promote the development of Chinese goods and technical service Exit of.

export credit for buyers Medium, Loan object Must be ICBC Recognized from China import The importer's bank can also be the importer under special circumstances. The export equipment supported by commercial loans should be mainly made in China.

All banks have the same approach to trade financing, but there are still subtle differences. When selecting a trade financing bank, the operation method should be detailed.

Development status

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Current situation in China

Since China's accession to the WTO, the number and scope of China's foreign trade have expanded rapidly, and the main body of foreign trade will expand to multiple levels Settlement instrument It will be diversified and new businesses will continue to be launched. The corresponding international trade financing methods will also show unprecedented diversification, complexity and specialization. Its potential risks are also growing and changing. For China State-owned commercial bank For example, how to seize the opportunity and expand International trade financing , Lanshou International Settlement business , maximize the financing benefits and Intermediate business At the same time, effective prevention and control Financing risk , which is also worth paying attention to.

Trade Finance Books

The operation and management of China's commercial banks' financing business is relatively extensive, and they have not yet fully established strict standards and standardized business operation procedures for various financing businesses. The international trade financing business carried out is exempted bond L/C issuance and export Packaged loan , import and export documentary bills and other basic forms, but like international factoring The proportion of more complex businesses is small, and international trade financing Business volume And Market supply Compared to the space uncoordinated 。 Therefore, we must learn from it International trade financing Based on the actual situation in China Financing risk Cause of formation.

Inadequate understanding of the importance and risks of trade financing business

First, commercial banks Senior management Lack of understanding and experience of international trade financing business with relevant departments Risk The general understanding is relatively shallow, which is manifested in two tendencies: first, it is wrongly believed that international trade financing does not require the use of actual funds, but only needs to lend documents or issue letters of credit to earn money from customers Service Charge and Financing interest , is a zero risk business, which directly led to a large number of letters of credit in the mid-1990s to make advances Formed non-performing assets of banks; Second, when problems arise, they also believe that international trade Financing risk The measures taken have led to the difficulty of international trade financing credit compared with general loans, and the approval time is long, which has restricted the development of this business.

Secondly, the traditional business of commercial banks is Home Currency The proportion of business and international business is relatively small, and they do not have advantages in institutions, talents and customers, so most people think that they should spend a lot of manpower, material resources and financial resources to develop International trade financing It is better to concentrate on local currency business. In addition, the international trade financing business has improved the bank's Profitability , optimization Credit assets The role of quality and other aspects is not well understood, and the number of trade financing business in the whole credit assets is small, so the role is not significant.

Lack of effective prevention within the bank management system ， Risk Management Backward means

Deeply develop trade financing

The risks involved in international trade financing business include customer risk, country risk, and foreign risks agency risk 、 international market Risk and Internal Operational risk 。 The management of these risks requires advanced technical means to effectively and organically link the relevant departments and branches of the bank. and Bank of China stay Foreign exchange business The processing procedures of are relatively backward, businesses between different branches and departments operate independently, and there is a lack of network resource sharing Lack of unified coordination and management shared resource The purpose of risk monitoring and mutual restriction. For example, one department of the International Business Department is responsible for financing business Risk Management Business operation risk control and business expansion. Risk control is weak, and there is a lack of mutual restriction and professional risk control within the bank. In the face of the widespread operating losses of Chinese import and export enterprises and the objective realization of a large number of non-performing bank debts, the bank's trade financing has huge potential risks.

Risk of disorderly competition in financing business Management standards

China's international trade financing business is relatively short compared with foreign countries, and the market is still immature restraint mechanisms It is not perfect. With the increasingly fierce competition in international settlement business of commercial banks banking business The form is relatively simple, in order to strive for greater market share , competing to attract customers with preferential terms, the credit review and requirements for corporate customers are also getting lower and lower, and the control of trade financing risks has been relaxed, for example, some banks have reduced the issuance of letters of credit bond The collection proportion of; Some even take Credit issuing , free of deposit; Some are opened when the margin is insufficient and the guarantee or mortgage procedures are incomplete Usance letter of credit Wait, these practices have destroyed risk management The risk of bank's trade financing business is aggravated by the standard of.

Weak marketing team and lack of compound high-quality Business personnel

International settlement business is highly professional and requires high quality of business personnel, but China's commercial banks International trade financing In terms of talent shortage, limited resources of talents Are also highly concentrated management layer At the same time knowledge structure single. Since all banks operate international business as an independent business Institutional setup Shangyou International Business Department be responsible for international settlement And associated trade financing business. This has resulted in the lack of relevant practitioners who are only familiar with international settlement Financial accounting Business knowledge in terms of credit management, etc., can't accurately judge and grasp customer credit from financial information and business style, and can't fully grasp every link in the whole process of international trade financing, which reduces the Product Functions And market effect, so there is a lack of strong control over its risks.

International trade financing business legal environment imperfect

International trade financing business involves international financial instruments Cargo right The mortgage, pledge, guarantee, trust and other acts of goods require specific legal definitions of the rights and responsibilities of various acts in law, but China's financial legislation lags behind the development of business. Some International trade financing The commonly used terms and practices of are not standardized in Chinese law. For example, how about the bank's rights to the documents and goods of the goods in the bill purchase business, and how about the bond relationship between the bank and the customer, Import documentary bills Commonly used in Trust Receipt Whether it is effective, Usance letter of credit Whether the bill accepted by the bank in business can be paid by the court. Therefore, this imperfect legal environment further increases the risk of China's trade financing business.

Service challenges

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Companies in all links of business activities have known to hold Inventory cost Many companies have carried out practical activities to streamline Value chain And keep inventory At the lowest value. They are trying to put similar thinking Mode application To their financial management As a result, banks are taking a new look at the trade financing services they provide to enterprise users.

When these services are recognized, Cash Flow Statement Many different measures and financial products 。 This is actually in time Inventory management They are very similar. Technological improvements, such as the Internet, have made the world a more trustworthy place. Traditional trade financing transactions involving letters of credit are too time-consuming and slow - costing customers a lot of money.

But the world is also becoming more complex. For example, trade, if you operate one or more suppliers VMI System, as the quantity of supplies is considered too small, how do you deal with the payment of these goods? If you give Offshore company Outsource most of your value chain. When is the payment due? The company is looking to reduce their business financing cost Some plan to go to the bank and say, "Give me one Electronic system You can own all my trade business. "

The bank is selling Cash Flow Statement But few of them can really fulfill their promises. They already have many components, but they still usually need a lot of consulting services to make them work. What these banks need is a highly integrated system, which provides necessary support for the provision of cash flow statements through the connection between the buyer and the seller.

Development countermeasures

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Raise awareness of the development of international trade financing business

With China's further opening up, international trade has become increasingly frequent, total imports and exports It will be greatly improved, which will certainly contribute to the development of Foreign exchange business In particular, trade financing business provides great Market space 。 Commercial banks at all levels should update their concepts and improve their understanding of the development of foreign exchange business, especially international trade financing business. Starting from the severe challenges after China's accession to the WTO, we should actively develop international settlement business with trade financing business as a tool, and adjust business strategy And work ideas, pay close attention to Foreign banks Trend. Therefore, commercial banks should strengthen Market information Search and adopt various methods conducive to promoting the development of international settlement business Policy measures 。

Implementation of adjusting institutional setting Separation of loan audit principle

In order to meet the needs of business development, it is necessary for banks to adjust their internal institutions and redesign the international trade financing business operation pattern , stripping off the loan audit mode and implementing Credit line Management to be effective control risk And actively serve customers. ① It should be clear that trade financing belongs to Credit business Must be included in the bank wide credit management. The Credit Department shall carry out Credit evaluation Based on this, the customer credit line is preliminarily established. By establishing Separation system of loan audit , will credit risk and international settlement The Credit Department, the Credit Approval Committee and the International Business Department are responsible for the risk, and ultimately achieve a unified Comprehensive credit The separation of loan review and special risk control under the management system, so as to take different measures to control property rights and achieve the purpose of preventing and controlling risks. ② The credit line should grasp the following points: First, the credit line should be controlled Usance letter of credit The longer the term, the greater the risk; The second is to control the exemption ratio of the full amount of the letter of credit by paying a certain amount of bond To strengthen the constraint and control of customer business; Third, establish an assessment period; Fourth, implement the management of branch credit line under the total credit line; Fifth, establish and improve internal control system Track the import and export credit line of basic customers, and strengthen the coordination and cooperation within the department.

Establish scientific financing trade Risk Management System

Develop compliance International trade financing Characteristic customers evaluation criterion Choose customers who have been engaged in international trade for a long time and have good credit. Establishment of credit approval center and trade financing business department, which affect international trade financing risk factor There are relatively many, so risk prevention requires commercial bank personnel to have the knowledge of credit business to analyze and evaluate customers' credit. So as to take advantage of talent advantages to prevent and resolve various business risks in advance and afterwards.

Improve risk supervision in the whole process of system implementation

(1) Make pre loan preparation before financing and establish pre loan risk analysis System, strict review and approval of financing Credit line , control operational risk credit risks 、 market risk ， Natural risk and social risk , Country Macroeconomic policy Risk exchange-rate risks And analyze the applicant, the applicant and Issuing bank Of Credit And other aspects shall be strictly reviewed, adverse factors shall be found in time, and preventive measures shall be taken.

(2) Strictly manage L/C business. L/C has always been regarded as a relatively reliable form in international trade Settlement method 。 Review L/C It is the primary responsibility of banks and import and export enterprises. First, the authenticity Effectiveness Determine the type, purpose, nature, circulation mode and enforceability of the letter of credit; Secondly, review the credit standing, capital institution, capital strength and business style of the issuing bank and understand the true Credit line ； Third, timely understanding product price , Delivered type of shipping , shipping documents, etc Comprehensive evaluation , objectively judge its expected repayment ability and whether there is a fraudulent purpose; Fourth, careful review Transferable letter of credit , strictly examine the issuing bank and Transferring bank And review the terms of the letter of credit.

(3) Establish perfect laws as soon as possible Safeguard mechanism And act in strict accordance with the law. We should strengthen the research on the existing relevant legislation, find out the incompatibilities in combination with the actual work and the future development trend, and appeal to improve the relevant legislation as soon as possible through relevant channels. Use legal weapons to maximize the protection of bank interests and reduce risks.

Laws related to trade finance

Strengthen cooperation with foreign banks

Under the situation that many foreign investors are optimistic about the Chinese market and foreign trade is developing well, State-owned commercial bank We should seize this opportune moment to develop and occupy China's Foreign exchange business Market, and jointly strive for some Utilize foreign capital To expand the trade financing business of China's commercial banks in many aspects and at multiple levels.

to guard against Financing risk Awareness and ability of

International trade financing It is a business with a wide range of knowledge, strong technology and complex operation professional qualities Very demanding. China has been developing this business for a short time and needs to understand both International practice Comprehensive professionals who understand operating technology and are proficient in credit business. The competition of international settlement business of commercial banks is essentially a bank Operation management Horizontal and quality of personnel Competition. Therefore, it is urgent to improve the quality of trade financing management personnel and enhance the awareness and ability to prevent risks. We should cultivate a group of familiar international finance , international trade, law and other knowledge. First of all, we need to introduce high-level and high-quality talents. We can make full use of the agency's advanced technology and select relevant topics to invite experts from the agency Special lecture If conditions permit, employees can also be sent to study in foreign commercial banks. Secondly, in daily work, we should pay attention to the summary and analysis of cases, accumulate experience in time, and consciously strengthen international trade knowledge and Transportation insurance Business learning, paying close attention to international trade Market dynamics Understand and grasp the changes of commodity market, cultivate insight into the international trade market, enhance the ability to identify potential risks, and constantly improve their own business level. Third, do a good job of job training, and constantly improve the service quality and moral cultivation 。 Fourth, strengthen risk awareness , constantly improve employees' ability to identify and prevent counterfeits, and strive to prevent and resolve them International trade financing Risk.

Development trend

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1、 scope of business Gradually expand and enrich products

From traditional letters of credit, collections, remittances, etc international settlement Product bill purchased and Discount business And expand services to cover all links of the entire industrial chain of customer procurement, production and sales; Provided from Fund settlement And financing services to prevent various risks and beautify financial statements Insurance, warehousing, customs declaration and financial advisory services; from International trade financing Services are extended to domestic trade financing services.

2. Transfer of document business to credit business

along with Buyer's market Formation of, sell on credit (OPEN ACCOUNT) has gradually become the most important transaction mode 。 According to statistics, about 70% of China's international trade is settled on credit, while Domestic trade The proportion of credit sales is higher. Based on this, the traditional document business such as letter of credit and collection continued to decline, while the remittance business based on credit sales rose rapidly. Around credit sales Settlement method The trade financing business of.

3. Standardized single product Structured products transfer

along with customer demand The diversified and standardized single product is difficult to meet the all-round needs of customers. Trade financing services must be designed for customers according to their needs Tailored Structured product solutions.

advantage

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1. The entry threshold of trade finance is low, which effectively solves the problem of SMEs financial index The problem of failing to meet the bank standard and being unable to finance.

2. The approval process of trade financing is relatively simple, and enterprises can quickly obtain the required funds.

3. Average trade financing ratio Loan risk Low, can effectively reduce Bank risk 。

4. Trade financing business can expand the source of bank income and adjust the income structure.

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