Corporate Banking

Commercial Draft

The commercial draft is a kind of bill that the drawer draws and entrusts the payer to pay to the payee or the bearer unconditionally a specified amount of money on a fixed future date. Commercial drafts can be classified into two types: bank acceptance draft and commercial acceptance draft. 

1. Bank Acceptance Draft

(1) Product Definition

The commercial drafts to be accepted by a bank are bank acceptance drafts. 

(2) Product Features

Compared with commercial acceptance drafts, the bank acceptance drafts boast more reliable credit guarantee of banks, a broad circulation scope, and strong cashability, not only reducing capital tie-up but also saving the capital cost for enterprises. 

(3) Application Procedures

When having actual transactions or getting involved in actual debtor-creditor relationship with other organizations, any customer opening a deposit account with the Bank that boasts good settlement standing and credit standing (the credit rating requirement of an acceptance applicant providing full security deposit may be lower to some extent) and has reliable financial sources for paying the draft value can apply for acceptance of commercial drafts after paying a certain proportion of security deposit and providing guarantee accepted to the Bank for the remaining proportion. The customer must present the following documents: 

● Letter of acceptance application; 

● Business license for corporation, duplicate of organization code certificate and loan note (card); 

● Audited financial statements of the previous year and recent financial statements; 

● Sales contract signed between the buyer and seller; 

● Guarantee documents for applying for acceptance; 

● Other materials required by the Bank. 

2. Commercial Acceptance Draft

(1) Product Definition

The commercial drafts to be accepted by the payer other than a bank are commercial acceptance drafts. 

(2) Product Features

The drawer of a commercial acceptance draft can either be the payee or the payer and the payer is the acceptor. Without restriction on the threshold amount, the commercial acceptance draft boasts a payment period up to 6 months and can be used to apply for discount and transferred by endorsement. 

(3) Application Procedures

Any customer opening a deposit account with the Bank can use commercial drafts when it has actual transactions or gets involved in actual debtor-creditor relationship with other organizations. 

When drawing a commercial acceptance draft, the payee or payer must present to the Bank the sealed “Trust Deed of Commercial Acceptance Draft”. 

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