A bill of exchange drawn upon the payer by the drawer, to pay the beneficiary or the bearer unconditionally a specified amount of money at a fixed future date.

Based on the nature of the acceptor, commercial drafts may be classified into banker's acceptance (accepted by banks) and trade acceptance (accepted by others).

Banker's Acceptance

Features

•  Accepted by the bank

•  More creditable with the bank's credit guarantee

•  Wide circulation, strong liquidity

•  Cost efficient

Business Processing

Eligible applicants are clients who

•  Maintain deposit accounts and good settlement relationship with the bank;

•  Enjoy sound credit standing (with possible relaxation in the case of full deposit guarantee);

•  Owe reliable source of funds to pay the draft, and

•  Have made actual transaction or are involved in actual debt rights or debt obligations.

To apply, the client shall put into a certain proportion of guarantee deposit and provide appropriate guarantees acknowledged by the bank for the other proportion (if any). The following documents shall also be presented:

•  Letter of Application;

•  Business License passed annual inspection, photocopy of the Certificate of Corporate Code, and the Loan Card;

•  Audited financial statements of the last year and the recent financial results;

•  Guarantee documents;

•  Other certificates and documents required by the bank.

Trade Acceptance

Features

•  Accepted by a payer other than banks.

•  Both the payee and the payer can be the drawer.

•  No threshold in amount.

•  Long valid period up to 6 months.

•  Can be used to handle bills discount.

•  Transferable by endorsement.

Business Processing

To apply, the drawer shall submit, together with other required documents, the sealed Proxy for Trade Acceptance to the bank.