Domestic enterprises tend to set up overseas subsidiaries for purchases of bulk commodities and raw materials. However, such overseas vehicles often find it difficult to be financed by overseas banks due to their limited years in operation and weak financial position.
After receiving a qualified master L/C with parent company as applicant and its overseas subsidiary as beneficiary, OBD issues a B/B L/C based on the subsidiary’s application and purchases its inward bill to finance its import operations.
This product helps the overseas subsidiary access B/B L/Cs and bill purchase services based on the credit of its domestic parent company, thus facilitating its import activities of commodities and raw materials. In comparison with traditional L/C applied directly by parent company, B/B L/C shifts financing to overseas capital market for lower costs and forex risks. There are also additional benefits for B/B L/C users, like more sound credit records and experiences in transnational operations and improved financial and business positions.
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