Bill of exchange transactions

Bill of exchange discounting

Bill of exchange discounting is a form of loan of a business entity by the bank by means of purchasing a bill of exchange for money at a discount up to the time of its payment, in order to gain profit from bill of exchange payment in full. Discounting operations performed by the bank include non-resource discounting and discounting with reverse.

Non-resource discounting is a type of accounting, where a bearer of bill is no longer a party liable on a bill as a result of non-resource endorsing on a bill by its bearer or due to transfer of a bill to the bank by a bearer without endorsing, if the last endorsement is in blank.

Discounting with reverse is a type of discounting, where a bearer of a bill lays non-bill obligation on the bank to clear bills discounted by the bank prior to their payment. This type of discounting differs from the standard one by the fact that settle of a bill is not performed by a party liable on a bill – payer (a drawer of a standard bill or an acceptor of a bill of exchange), but a bearer of a bill liable to clear a bill.

Advantages of operation for a bearer of a bill:

  • replenishment of working capital – receipt of money from discounting for financing current needs up to the moment of settle of a bill
  • possibility to allocate discount amount to gross expenditure during disounting of bills
  • in-blank transaction
  • possibility to pay accounts payable of a bearer of a bill using funds from bill discounting

Advantages of operation for a drawer of a bill:

  • flexible management of financial resources – possibility to perform financing on a timely basis without money from working capital
  • it is not necessary to use loan proceeds
  • possibility to gain additional profit in case of bill of exchange prepayment
  • transfer of expenses related to payment of interest on the provided load (disounting) to a bearer of a bill

Bill avalization

Avalization is a commitment of the bank to pay a bill fully or partially instead of one of the parties liable on a bill, if payer failed to pay a bill in time. Avalizing a bill, the bank provides a term loan to an avalized party. Aval is performed as a note on a bill or a separate sheet (allonge): "Per aval", "As avalist for ", "Avalized" or any other similar formula.

IBOX BANK avalizes both bill drawn against goods (drawn for shipped goods, provided services), and billes, provided by Tax Code for budget settlements (so called tax bill).

The Bank avalized the following types of tax bills:

  1. For production of alcoholic beverages (Resolution of the Cabinet of Ministers of Ukraine No.1260 dd. 27.12.2010)
  2. When taking from an excise warehouse ethyl alcohol nondenaturating, ethyl alcohol denaturating (industrial) and bioethanol to produce specific typed of production (Resolution of the Cabinet of Ministers of Ukraine No.1257 dd. 27.12.2010)
  3. When getting or importing to the country light and heavy distillates to produce ethylene (Resolution of the Cabinet of Ministers of Ukraine No.1215 dd. 27.12.2010)

Advantages of operation for a drawer of a bill:

  • increases reliability of a bill and goods seller's loyalty
  • possibility to settle a bill with state tax service authorities
  • saves working capital

Advantages of operation for a bearer of a bill:

  • a bill, avalized by the bank is reliable and provided by a security, which increases its bearer's opportunities to use it (borrowing against bill pledging, disounting in the bank, delivered goods settlement, negotiation of a bill)
  • receipt of money by a bill from an avalist in case of failutre to receive payment from a drawer of a bill

Domicilation

Settlement of bills, where the bank is a special payer (Domiciliary Agent), - bank performs bills of exchange transactions by order of settlor - payer by a bill based on instructions received from a settlor:

  1.  Acceptance of bills to payment from a legal bearer of a bill
  2. Settling a bill
  3. Transfer of bills to a payer after they fully paid

Advantages for a client:

  • it is not necessary to control due day for a payment upon drawn bills
  • settlement of a bill, which is domiciled by the bank, in all branches of the Bank
  • reduction of expenses of a bearer of a bill when showing a bill of при пред'явленні до платежу векселя a non-resident drawer of bill. It makes domicile closer to business hot spots
  • possibility to settle accounts with contractors, omiting blocked accounts

Administration of investment business: tel. (044) 205-41-95, (044) 205-41-80
Е-mail: [email protected]