A cross-border financing loan business at ICBC's Beijing Branch recently opened. It is another innovative measure in the construction of the "Two Zones" that aims to promote the growth of cross-border RMB business in the Beijing Economic and Technological Development Area (BDA).

In this type of business, a domestic customer (borrower) applies for a cross-border domestic and foreign currency loan from an overseas institution, the overseas institution (direct financing bank) signs a financing contract with the domestic customer to provide financing, then the domestic branch accepts the invitation of overseas banks to participate in the credit risk of domestic customers.

The night view of BDA [Photo/kfqgw.beijing.gov.cn]

At the beginning of this March, StarNeto proposed a loan request to the ICBC branch in the Beijing Pilot Free Trade Zone. 

The loan contract was signed on March 31. After that, the loan of 20 million yuan ($3.06 million) was delivered to the account of StarNeto at 8 pm on April 1. The whole process took less than one month.

"Since receiving the demand, we have provided companies with butler-style services from the preliminary application to the review and signing of the agreement, to save them time and energy," said Pei Fujia, head of the international business team of ICBC Beijing Pilot Free Trade Zone Branch.

"This allows companies that do not have cross-border businesses to borrow overseas loans without corporate guarantees. It is easy to operate and has low loan costs," noted Wu Ping, CFO of StarNeto.

When handling this cross-border loan business, the ICBC Beijing Pilot Free Trade Zone Branch conducted global cost comparisons over the same period, and the final loan interest rate was reduced by about 1 percent compared to the domestic rate.