Interim Measures For The Bank's Factoring Business Management

Original Language Title: 商业银行保理业务管理暂行办法

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Read the untranslated law here: http://www.chinalaw.gov.cn/article/fgkd/xfg/gwybmgz/201503/20150300398612.shtml

Interim measures for the Bank's factoring business management

    (April 3, 2014 2014 Banking Regulatory Commission released 5th come into force on the date of promulgation) Chapter I General provisions

    First to standardize the Bank's factoring business management, strengthening of factoring a prudent management, promote healthy development of factoring business, according to the People's Republic of China contract law, the People's Republic of China real right law and the People's Republic of China banking supervision law and the People's Republic of China commercial bank law and other laws and regulations, these measures are formulated.

    Article People's Republic of China territory legally established commercial bank's factoring business, should comply with these measures.

    Article banks offering factoring shall adhere to compliance according to law, prudent management, the principle of equality, voluntariness and fair and honest.

    Fourth commercial banks offering factoring should handle business development and risk management.

    Fifth China Banking Regulatory Commission and the Agency in accordance with these measures and related laws and regulations on factoring exercise supervision over and management of commercial banks.

    Chapter II definitions and classifications Factoring in sixth article of the rules was premised on creditors to transfer its receivables, collection of receivables collection, management, bad debt guarantee and financing of integrated financial services.

Creditors to transfer its receivables to commercial banks by commercial banks to provide services in at least one of the following, namely, factoring:

(A) collection of the accounts receivable: commercial banks according to the accounts receivable account, active or request of the creditor, such as telephone, mail, door-to-door or using legal means, such as collection of debtor.

(B) management of the accounts receivable: requirements of commercial banks according to the creditor, regular or ad hoc basis to provide it on the recovery of accounts receivable, overdue accounts, statements and other financial and statistical reports, assistance with accounts receivable management.

(C) bad debt guarantee: after factoring agreement with creditors of commercial banks, credits approved for the debtor, and within the approved limit, no commercial disputes to the creditors of receivables, provide the intended payment guarantees.

(Iv) factoring: on the premise that legitimate and effective transfer of the accounts receivable bank financial services.

    To accounts receivable for mortgage loans, are outside the scope of factoring.

    Seventh commercial banks should, according to "determine the ownership, transfer out of accountability" principle of rigorous review and confirm the authenticity of the claim, ensure that initial accounts receivable ownership clearly determined, all transfer documents complete and undisputed powers and responsibilities.

    Article eighth receivables in these measures refers to enterprises for the provision of goods, services or rental income caused by the formation of monetary claims and assets, but do not include claims for payment of the notes or any other securities.

    Nineth mentioned in these measures refers to the assignment of the receivable, refers to all receivable related rights and rights of alienation.

Article tenth factoring business category:

(A) domestic and international factoring factoring

In accordance with the nature of the underlying transaction and the creditor, the debtor is located, is divided into international and domestic factoring factoring.

Domestic factoring creditors and factoring of debts per capita in the territory.

International factoring is the creditor and the debtor has at least one overseas (including the territory of the free trade zone, the free trade area, customs, etc) of factoring.

(B) factoring with recourse and non-recourse factoring

In accordance with commercial banks in bankruptcy, unjustified default or when unable to service the accounts receivable, can transfer to the creditor against accounts receivable financing, require a creditor to repurchase receivables or return into factoring with recourse and non-recourse factoring. With recourse factoring refers to expire when you cannot recover from the debtor of the receivable, commercial banks can transfer to the creditor against accounts receivable financing, require a creditor to repurchase receivables or return.

With recourse factoring, also known as buy-back type of factoring. Non-recourse factoring refers to accounts receivable in the absence of commercial disputes could not be settled, by commercial banks accounts receivable bad debt risk.

Non-recourse factoring, also known as buyout of factoring.

(C) Dan Baoli and dual-factoring

Based on the number involved in factoring services factoring Agency, into Dan Baoli and dual-factoring.

Dan Baoli is alone by a factoring entity providing factoring services for buyers and sellers.

Dual-factoring factoring is composed of two agencies to provide factoring services to buyers and sellers. Factoring the seller and Agency for the different branches of the same bank, in principle, be regarded as dual-factoring.

Commercial banks should be clear in related business management approach as the buyer factoring institutions and factoring the seller agency duties.

    Insurance buyer's credit risk of bank-insurance cooperation, regarded as dual-factoring.

    Chapter III factoring business management

    11th commercial banks should, in accordance with this approach to define the specific factoring products, according to their own situation to determine the appropriate scope of business, development of factoring clients access standards.

    12th in dual-factoring, commercial banks should factoring institutions to develop access standards for qualified buyers, buyer of factoring for non-bank institutions, should be taken to list management, and strict access standards and procedures. 13th commercial bank should, according to its level of internal control and risk management capabilities, make suitable mortgage factoring accounts receivable of the business standard, specification scope of the accounts receivable.

Commercial banks may not be based on a legitimate basis for traded contracts, the consignment contract, unclear ownership of future receivables, receivables due to notes or other securities arising from factoring financing services such as claims for payment.

Future accounts receivable refers to the seller under the contract obligations are not fulfilled expectations of receivables. Ownership of all of the accounts receivable refers to ownership of receivables with uncertainties, including but not limited to other banks or commercial factoring companies, such as third party pledge or transfer of the receivable.

Obtain the written consent of the pledgee custody and gave up against pledge rights and access to the assignee prior written consent except for the transfer of ownership of the receivable.

    Claims for payment of the notes or any other securities refers to or the holders of other securities not held or the basis of securities trading accounts receivable documents, based only on the negotiable instrument or security itself to the instrument or security principal requests by instrument or securities recorded on the right amount of payment. 14th article commercial banks accepted insurance acting financing business Shi, should strictly audit seller and/or buyer of funding letter, and business and the financial status, analysis intends do insurance acting financing of should accounts receivable paragraph situation, including whether out quality, and transfer and account age structure,, reasonable judge buyer of payment wishes, and payment capacity and seller of repo capacity, review sale contract, information of authenticity and legitimacy.

    On the provision of services, to undertake the project or other non-receivable arising out of sale of goods causes, or buyer and seller for the associated companies receivables, should we will carefully examine transactions background the authenticity and price is reasonable.

    15th article commercial banks should on customer and trading, related situation for effective of due diligence survey, focus on trading opponents, and trading commodity and the trade habits, content for audit, and through audit documents original or Bank recognized of electronic trade information, way, confirmed related trading behavior real reasonable exists, avoid customer through virtual open invoice or forged trade contract, and logistics, and back paragraph, means malicious cheat financing.

    16th Dan Baoli financing, in addition to strictly audit the authenticity out of underlying transactions of commercial banks also need to identify the seller or the buyer credit management working capital loans, strict enforcement of accepted and investigation, risk assessment and evaluation, payment and monitoring controls the whole process. 17th commercial banks to handle factoring business, should, in principle, in the factoring contract the seller is required to open for withdrawal of the receivable factoring account and other related accounts.

    Commercial banks should designate a factoring account funds to monitor and ensure that funds are first of all for the return of bank financing.

    18th interest commercial banks should fully consider financing, factoring fees, cash discounts, historical collections records, industry characteristics, such as accounts receivable dilution factor, determines the proportion of factoring financing. 19th commercial banks carry out factoring operations, based on factors such as the terms of payment of the receivable should be rationally determine the financing period. Commercial banks may be receivable due date and financing sets the period of time during the day to the expiration grace period.

    Grace period according to seller and transaction history, industry practices and other reasonable factors identified. 20th Bank provides factoring financing, factoring with recourse financing of an amount to the creditor credit information; non-recourse factoring are not included in the creditor and the debtor's credit information.

    When commercial banks guarantee payment or advance shall by factoring risk substance, decided to take into account the creditors or the debtor's credit information.

    The fourth chapter factoring risk management

    Article 21st science should be prudent in formulating trade financing business of commercial bank development strategy, and included in the total unity of strategic planning, decision-making procedures and establish scientific and effective trade financing business incentive and restraint mechanisms, effective prevention and control of factoring business risk.

    22nd commercial bank should develop detailed specifications factoring management approaches and procedures, clear scope, related functions of the Division of labour, credit and financing system, business operation and risk control, monitoring and disposal policy.

    23rd commercial bank should periodically assess the effectiveness of factoring policy and procedures, strengthening internal audit supervision to ensure stable operation of the business.

    Article 24th factoring large scale, high complexity of commercial banks, must set up a specialized factoring departments or teams, equipped with professional staff, responsible for product development, business operations, management and risk control, and so on.

    Article 25th factoring should be direct, not accounts receivable collection, management and other business process outsourcing to a third party.

    26th commercial banks should be factoring into the unified credit management, clearly involved in various types of factoring risk category, seller financing, the buyer's payment risk and factoring institutions risk project management.
27th Bank factoring mandate should establish a unified management system, managed by the Head Office of top-down implementation of mandated, not for unauthorized or ultra authorized factoring.

    28th for factoring commercial banks should establish a complete CF Admin process, a former back-office duties should be clear and relatively independent.

    Article 29th of factoring risk management should be integrated into the overall risk management systems, dynamic focus on the seller or the buyer's operation, management, financial and capital flow risk information, regular reconciliation with the seller or the buyer, effective control of factoring business risk. Article 30th factoring business IT system building should be strengthened.

    Factoring large, complex banks that are more electronic business operation and management system should be established, to credit, transaction data and business processes in real-time monitoring, and data storage and backup.

    31st when the buyer's credit risk, factoring Bank after the fulfilment of payment obligations, advances should be included in the table, as bad loan management.

    32nd commercial banks should, in accordance with the Bank's capital management procedures (trial implementation) requires, according to the real risk of factoring, measurement of risk-weighted assets, and made capital.

    The fifth chapter legal liability Article 33rd in violation of these regulations to require the factoring business of commercial banks, the CBRC and its local agencies shall order correction within.

Commercial Bank, one of the following circumstances, the CBRC and its local agencies may be taken as the People's Republic of China Banking Regulatory Act 37th supervisory measures provided for in article:

(A) failure to establish factoring management approaches and procedures that is, factoring;

(B) disobey 13th, 16 article mortgage factoring;

    (C) the operational review, financial management, risk management and other processes without due diligence.

Article 34th commercial bank factoring exists when any of the following circumstances, the CBRC and its local agencies in addition to the article 33rd to take regulatory measures, also under the People's Republic of China Banking Regulatory Act, 46th, 48th, the imposition of penalties:

(A) due to improper management of factoring credit risk significant losses, severe operational risk loss event;

(Ii) unfair related transaction or lower standard illegal handling in a disguised form of factoring;

(C) to advance was not true and accurate accounting records or covered with false accounting for factoring risk substance;

    (D) other circumstances as serious violations of these rules.

    The sixth chapter supplementary articles

    35th policy banks, branches of foreign banks, rural cooperative banks, rural credit cooperatives, finance companies and other financial institutions carry out factoring operations, in accordance with the measures implemented.

    Article 36th China Banking Association should give full play to autonomy, coordination, normative functions, establish and continuously improve the factoring industry self-regulatory mechanism. 37th article of the approach by the China Banking Regulatory Commission is responsible for the interpretation.