What Is a Rediscount?

Rediscounting is the act of the central bank to provide commercial banks with financing support by buying discounted but not yet-expired commercial paper held by commercial banks. Commercial bills of exchange are debt certificates issued by the purchaser for the products of the purchaser and sold without payment in time, and issued within the scope permitted by law and repaid within the agreed period. In general, in order to ensure that the buyer can repay the debt at maturity, such debt evidence must be accepted by the purchaser's bank, that is, the account bank promises that if the bill expires but the customer is unable to repay The debt will be paid for by the bank.

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As the bill of exchange is a bill promised to be paid unconditionally by the buyer's bank, the bank that sells the bank is willing to accept the bill to provide its customers with the required funds in a timely manner. Commercial banks' purchase of such bills is bill discounting. Because there is a time difference between the time when the bill is discounted and the time when the bill expires, during this time, the discount of the bill is no different from the commercial bank providing loan support to its customers, so the factor of loan interest is included. When commercial banks discount bills, they cannot

Rediscounting means that commercial banks or other financial institutions will discount the

Rediscounting as the three traditional monetary policy tools of Western central banks (

Conclusion of purchase and sales contracts

When a buyer and a seller are engaged in a commodity transaction, the two parties must enter into a purchase and sales contract to clarify the commodity transaction relationship. Real and legal commodity transactions are the basis of commercial bill acceptance, discounting and rediscounting. The purchase and sale contract is proof of this transaction

Commercial banks hold unexpired bills of exchange

Acceptance, discounting and rediscounting of commercial bills have only gradually developed in recent years. In 1994, in order to further rectify the order of commodity transactions, standardize commercial credit, and solve the growing problem of mutual arrears between enterprises, the five industries (coal, electric power, metallurgy, chemicals, railways), The use of commercial bills of exchange is promoted in the adjustment of sales. The People's Bank of China specially arranged 10 billion yuan of rediscount funds to start discounting and rediscounting of these bills. Therefore, the coal industry has implemented "no payment, no coal, no bank acceptance" Drafts do not issue coal, nor do they pay debts

The practice in the past few years shows that commercial bill acceptance, discounting and rediscounting have played a positive role in guiding capital investment, standardizing commercial credit, and helping enterprises link production and sales relations. First, it will help guide credit funds to tilt towards key state-owned industries and promote the development of large and medium-sized state-owned enterprises. By preferentially discounting and re-discounting the bills of key industries, key enterprises, and key products, it is possible to implement the national industrial policy and effectively alleviate the financial difficulties in production and operation of large and medium-sized state-owned enterprises. The second is to help standardize commercial credit and prevent new arrears. Third, it is conducive for enterprises to link production and sales and reduce capital occupation. A commodity or material often goes through multiple industrial sectors and multiple transactions. In the past, loans were required from commercial banks in each link, and one set of materials occupied several sets of funds. By using commercial bills of exchange, one vote can be carried through and they can be connected into an orderly debt chain, which strengthens the economic responsibilities of both creditors and debtors and saves credit funds and corporate expenses.

Of course, there are also some problems in commercial bill acceptance, discounting and rediscounting business development. Some criminals use fake bills and "clone" bills to draw bank funds and commit frauds. Commercial bills mainly rely on the bank's credit commitment support. The development of commercial acceptance bills based on corporate credit lags behind; commercial bills everywhere The development of China's bills is uneven, and the amount of bills in some places is not large. The commercial banks have different standards for bill operations, and there are many irregularities. Therefore, the commercial bill acceptance, discount and rediscount business needs to be vigorously developed on the basis of strict standards. In the future, breakthroughs should be made in the following three areas.

First, on the basis of standardizing business operations, vigorously promote the use of commercial bills and expand the financing function of bills. Encourage and actively guide commercial banks to adjust the structure of credit assets by developing bill acceptance, discounting, rediscounting and rediscounting businesses. On the premise of ensuring the authenticity of the bills, the central bank should appropriately simplify the rediscounting business procedures and effectively improve the rediscounting business operations. Re-discounting business for urban and rural credit cooperatives and enterprise group finance companies with good credit standing is no longer subject to industry restrictions on rediscountable bills, and various types of enterprises are eligible for rediscounting for qualified bills.

The second is to accelerate the development of regional bill markets based on central cities. Support commercial banks to centrally handle commercial bill acceptance, discounting, rediscounting and other bill business in central cities, promote bill circulation and transfer, and increase the efficiency and scale efficiency of bill business.

The third is to regulate bill behaviors in accordance with the law and prevent bill risks. In accordance with laws and regulations such as the Bills Law, the Implementation Measures for Bill Management and the Measures for Payment and Settlement, the discipline of clearing commercial bills is strictly enforced to ensure that commercial bills are paid on time. The People's Bank of China at all levels must effectively strengthen the daily supervision of commercial banks' handling of commercial bills, and shall accept penalties in accordance with relevant regulations for unlawful acceptance, discounting of commercial bills, delay in payment or transfer, and unreasonable refusal. Commercial banks at all levels shall strengthen the management of commercial bills of exchange, strengthen internal supervision and control mechanisms, strengthen supervision and inspection, promptly correct and deal with violations of regulations, and report to the People's Bank of China.