The Development Of Domestic Letter Of Credit In China

Regional differences in the transaction, mutual distrust of buyers and sellers, leading to the the parties in the transaction request the bank to be a credible intermediary. The letter of credit from the beginning could have been produced over a hundred years of history, as well settled in international trade risk-sharing problems of buyers and sellers and promote the development of international trade, international trade,.As one of the main method of payment, L/C has become an important financing tool for trade settlement in recent years,known as the life blood of international trade.Domestic Letter of Credit is to solve the distrust and financing problems between domestic enterprises that exists between commodity trading resulting from poor credit. The letter of credit is designed for the domestic variety of financing products. Bank use the letter of credit in the international business to master and apply the experience of the use of skilled domestic letter of credit business, in order to broaden the scope of banking and financial products to meet real customer needs, thus promoting the domestic commodity exchanges.Abroad in domestic settlement the use of domestic letters of credit has been for many years, but for Chinese enterprises, domestic letters of credit or something came into contact within recent years.The beginning of reform and opening up, China's domestic letters of credit and commercial bills of exchange also be introduced, as not suited to the then domestic credit and economic development environment, the domestic letter of credit has not been carried out in real terms,.In April 1989 "Bank settlement approach", even not introduced the provisions of the domestic letter of credit as a settlement tool. August 1,1997, the PBC has issued a special "domestic letter of credit approach" with a view to promote the use and regulation of the management of domesticf credi letter. However, after the introduction for a few years, no one really opened the domestic bank letter of credit business. Even though some banks opened in the business, it would only remain in the menu state, they promote the business without any effort.In recent years, with the rapid development of China's market economy, business-to-bank payment and settlement services have become increasingly demanding.The traditional "three votes in a card" to pay the RMB settlement has been difficult to satisfy current domestic trade and the increasing integration of international trade development requirements. Particularly in the relatively developed coastal areas, a number of large and medium sized enterprises have proposed the use of domestic letter of credit settlement yuan.At present, there are already Bank of China, Shanghai Pudong Development Bank, China Construction Bank, Guangdong Development Bank, China Minsheng Bank, CITIC Bank, etc. have been introduced and vigorously promoted the domestic letter of credit business. Although the banks have been offering a variety of products on the domestic letters of credit, and an annual business volume of domestic letters of credit and earnings are rising, but for most businesses, the domestic letter of credit is still a new product, one they do not understand and also not easily attempt to products. The relevant provisions of the domestic letter of credit in the documentation shortcomings, in the absence of supporting legal in specific operation revealed a large number of problems. Why is widely used abroad, the domestic letter of credit in China's development seriously lagged behind, why the international letter of credit to be a good use of domestic letters of credit are frequently ran aground, it should be how to promote the development of 'domestic letters of credit in China is the main purpose of this study.Correspondingly, the paper will be divided into six chapters:The first chapter is the Introduction section. Mainly introduction of the background and significance. Summarizes the current domestic research related to domestic letters of credit. On this basis, the proposed direction of this research and presented papers of the innovations and inadequate.Chapter II introduce the concepts of domestic letters of credit as a starting point.Then, through the comparison between domestic letters of credit and letters of credit from the scope of application, application files, type, form, involving the parties to submit the transport documents, the payment provisions, negotiate restrictive, modify the entry into force,negotiable nature of the insured amount, to pay a single time limit, submit the invoice requirements,I carried out comparative analysis of various aspects of the domestic letter of credit from a deeper understanding.Chapterâ…¢begins with the letter of credit and exchange business through in-country comparison, find the advantages of domestic letters of credit. Through multi-level analysis, can be drawn, in spite of exchange and other services have been developed over the years, the domestic letter of credit have irreplaceable advantages, banks should intensify the implementation of the launching of the domestic letter of credit.Chapterâ…£will be through product introduction and comparison of data, analysis of the current domestic letter of credit business in our state of development. First introduced the China Merchants Bank, Guangdong Development Bank, Bank of China launched five kinds of domestic letters of credit products, we can see that in recent years, banks attach great importance to the domestic letter of credit business, invested a great deal of manpower and material resources to develop to adapt to the specific economic environment and specific business demand for new products, the promotion of domestic credit has laid a good foundation. On the other hand, through the domestic letter of credit business in the forefront of the national banks ranked Minsheng Bank as a representative of a comparative analysis within 07-09 years, see that although the domestic letter of credit in the rapid development, but relative to the more mature product, development still lags far behind.Chapterâ…¤through a real case of the domestic letter of credit disputes, from the case after the case reached the trial process of the gradual revelation. Then with the case reflected the problem, coupled with the actual operation of the problems reflected, analyze the shortcomings of domestic letters of credit and to address these shortcomings, make relevant policy recommendations.Chapterâ…¥start from a different perspective, to see the development of the domestic letter of credit in the field of the unique advantages of e-commerce. E-commerce flourishes in China in recent years, but the settlement of the issue has been difficult to resolve,.There is a lot of security risks can just make up for domestic letters of credit. This chapter analyzes the domestic letter of credit products in the area of e-commerce.