2015/7/23

Entrust loan
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Entrust loan
Conventional Loan Financing
Special Lending
Introduction

Global Market Financing

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.

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Entrust loan
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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