2015/7/23 Entrust loan

http://www.boc.cn/en/cbservice/cb2/cb21/200807/t20080701_1319365.html 1/2

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Entrust loan

Introduction

Entrust Loan is a form of agency business in which the fund capital provided by the

entrusters, i.e. government departments, enterprises and public institutions (not including

individual trust), is loaned to the target borrowers for specified uses, in specified amounts,

over specified maturity periods and at a specified interest rate as instructed by the

entruster through Bank of China (the trustee), which helps retrieve the principal sum with

interest on the entruster's behalf.

Features

1. Fund borrowing and lending by Entrust Loan among enterprises or group companies will

become legal so as to meet demands of the enterprises for diversified financing channels.

2. Enterprises or group companies can more significantly reduce finance costs through full,

reasonable and effective utilization of surplus funds to maintain and appreciate value of

their overall funds.

3. With the existing savings as Entrust Loan, enterprises and group companies can not only

gain income with higher interest rate of deposit, but also avoid complicated approval

formalities in applying for bank's crediting, higher costs of funds, inflexible application of

funds and other shortcomings.

4. Issuance of Entrust Loan can solve problems of inter-city disbursement.

Currency Type

RMB, USD, JPY, EUR, HKD and GBP.

Interest Rate

Borrower, usage, amount, term, interest rate, calculation of penalty for borrowers,

guarantee and conditions, etc. of Entrust Loan shall all be determined by the entrusters to

the extent in line with relevant regulations of the People's Bank of China or the State

Administration of Foreign Exchange.

Charges

In principle, price shall be negotiated according to how complicated the operation is and

how much risk the business contains to the extent in line with relevant regulations of the

People's Bank of China and the Bank of China.

Target Customers

Government departments, enterprises and public institutions as legal persons approved by

and registered with commercial and industrial administration authorities (or competent

authorities).

Application Qualifications

1. Entrusters shall be government departments or enterprises and public institutions as

legal persons approved by and registered with commercial and industrial administration

authorities (or competent authorities).

2. Companies of loan entrusters that apply for Entrust Loan in domestic foreign exchange

shall be enterprises in the List of Multinational Companies and with approval of State

Administration of Foreign Exchange.

3. Borrower of Entrust Loan shall be solely determined in writing by the entruster and not

allowed to be designated by some third party other than the entruster.

Conventional Loan Financing

Special Lending

Global Market Financing

2015/7/23 Entrust loan

http://www.boc.cn/en/cbservice/cb2/cb21/200807/t20080701_1319365.html 2/2

Process

1. For application of Entrust Loan, the entruster and the borrower shall collect relevant

documents and material according to requirements of the Bank of China;

2. The bank is responsible for examining of compliance and completeness of material

provided by the entrusters and borrowers, handling material for completeness, compiling

Investigation Report on the Entrust Loan, filling out Entrust Loan Investigation and

Approval Form and submitting materials of the entrusters and borrowers to competent

authorities for approval according to requirements;

3. After approval, the Bank of China shall notify the entrusters and borrowers to jointly sign

Entrust Loan Contract;

4. After the entrusted funds transferred into special account of the Bank of China for

Entrust Loan, the Bank of China shall process lending procedures according to the

contracted terms of loans lending and charge loan handling fees in the agreed manner;

5. Bank of China shall process transfer of Entrust Loan interests related to the loans for

entrusters according to contracts and withdraw tax payable of the entrusters as required

by its obligation;

6. The book account for the issued Entrust Loan shall be established by the Bank of China

for regular checking;

7. On expiry of the Entrust Loan, the borrower shall repay the principal with the interests.

Entrust Loan of foreign exchange shall be repaid in line with regulations and approaches

prescribed by the State Administration of Foreign Exchange;

8. On request of the borrower, the Bank of China may extend the term of Entrust Loan with

approval of the entrusters.

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