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Corporate Information
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Corporate Internet Banking
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Domestic L/C
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The Banker’s Acceptance Draft is issued by the depositor with account opened at the acceptance bank. The bank should accept the draft after credit approval upon the application of the issuer. The bank will ensure unconditional payment to the payee or the draft holder at the designated date. The bank’s acceptance of the commercial draft issued by the issuer is a recognition and credit support to the issuer’s credit.
 Advantages | | |
Comparing with the existing settlement methods, the advantages of Domestic Letter of Credit lie in:
- Domestic Letter of Credit offers a more secured settlement approach for both buyer and seller. Under this settlement method, the trade buyer’s payment is made upon receiving the bills in compliance with the Letter of Credit. Therefore, the completion of goods delivery is controlled through bills presentation by the seller. As long as the seller deliveries the goods and presents the bills incompliance with the Letter of Credit, the payment is secured by the bank’s commitment.
- Domestic Letter of Credit is a flexible settlement method, which is suitable for delivery in batch and payment by installment or other diversified sales modules.
- Domestic Letter of Credit is a settlement method with financing function. When the trade buyer is short of fund, he can apply to reduce or exempt guarantee deposit to open the Letter of Credit.
Target Customers and Qualifications for Application | | |
- Target Customers
If your company has an independent legal entity qualification and chooses Domestic Letter of Credit as your settlement method in a domestic trade, you’re eligible to apply Domestic Letter of Credit through our bank with relevant documents.
- Qualifications for Application
If your company needs to apply a Domestic Letter of Credit, the following prerequisites have to be met:
(1) With an independent legal entity qualification, your company has registered with the Administration of Industry and Commerce and obtained legal entity’s business license and production permit upon annual examination.
(2) Your company has opened an RMB settlement account with our bank and have good settlement record.
(3) Purchase and sale activities under Letter of Credit should be the enterprises’ core business.
(4) Your company shall be able to provide sales contract with legal effect in order to issue Letter of Credit. And your company shall satisfy the guarantee deposit percentage requirement or other guarantee recognized by our bank. Application and Procedures for Issuing Letter of Credit | | |
- You’re required to provide us a copy of your business license upon annual examination, a copy of certificate of legal representative code, a copy of your Company’s Charter, sample of the authorized signer’s signature and other basic documents.
- Your sales contract of domestic trade.
- Completed 《Application of Letter of Credit》 and 《Commitment of L/C Applicant》 forms, stamped and endorsed with the authorized signature and submitted to our Corporate Banking department.
- If your company provides sufficient guaranteed fund, and deposit the fund into our bank account, we will open a Letter of Credit according to your application.
- If your company needs to reduce or exempt guarantee deposit, you need to provide further documents according to our requirements. Our bank will make credit investigation and business appraisal according to loan procedure. Upon approval, our bank will sign relevant agreement with your company and issue a Letter of Credit according to your application.
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