LOANS & ADVANCE (CREDIT)

NCC BANK
LOANS AND ADVANCES One of the two primary functions of a commercial bank is to extend credit to the deficit economic unit that comprises borrowers of all types. Bank credit is a catalyst of economic development. Without adequate finance, there can be no growth in the economy. Bank lending is important for the economy in the sense that it can simultaneously finance all of the sub-sectors of financial arena, which comprises agricultural, commercial and industrial activities of a nation. Therefore, a bank is supposed to distribute its loan able fund among economic agent-in-deficit. in a manner that it will generate sufficient income for it and at the same time benefit the borrower to Overcome his/her deficit. The word credit is derived from the Latin word credo meaning , I believe. In general, credit means granting of a period of time by a creditor to a debtor at the expiration of which the latter must pay the debt. Moreover, it can be defined broadly or narrowly. Broadly speaking, credit is the finance made available by one party (lender, seller, shareholder owner) to another (borrower, buyer' corporate or non-corporate firm). The former may be a pure lender (a financial institution or a private money-lender), a seller supplying goods against the buyer, promise of future payment, or a shareholder/ owner of a corporate/non-corporate making funds available to the firm viewed as a separate entity. More specifically, the term credit is used narrowly for only debt finance, To define in this way,- credit is simply the opposite of debt. It is a stock-flow variable and should be carefully distinguished from money. Nowadays credit is provided by a wide variety of Sources. This is the survival unit of the bank because until and unless the success of this department is attained, the survival is a question to every bank. If this section does not properly work the bank it may become bankrupt. This is important because this is the earning unit of the bank. Banks are accepting deposits from the depositors in condition of providing profit to them as well as safe keeping their interest. Now the question may gradually arise how the bank will provide profit to the clients and the simple answer is Loans & Advance. 4.4.1 PROCESS OF LOAN

Table- 07 Heads Application Characteristics Applicant applies for the loan in the prescribed form of the bank describing the types and purpose of loan. 1. Collecting credit information about the applicant to determine the credit worthiness of the borrower. Sources of information 2. Personal Investigation, Confidential Report from other bank, Head Office/Branch/Chamber of Commerce. 3. CIB (Central Information Bureau) report from Central Bank. i. Evaluation of compliance with its lending policy. ii. Evaluating the proposed security. 4. LRA is must for the loan exceeding one crore as ordered by Bangladesh Bank. 5. If everything is in accordance the loan is sanctioned Then bank prepare a loan proposal which contains terms and conditions of loan for approval of H.O. or Manager. Takes the necessary papers and signatures from borrower A loan Account is A/C-------------------------Dr. opened. Where customer Loan A/C

Sanction

Documentation

Disbursement

Respective --------------------------------------------Cr.

TYPES OF LOANS AND ADVANCES NCC Bank offers basically two types of Loan:1. Term Loan 2. Continuous Loan 5.2.1 Term Loan: Term loan are offered to facilitiate larger projects whose financing requirement cannot be satisfied by the time loan. It is offered in three categories and against sufficient collateral. Loans sanctioned for 1 to 3 years and 3 to 5 years are known as short and mid term loans respectively. However loans for more than 5 years are cateorized as long- term loan. 5.2.1.1 Customer Finance Scheme:

The Bank offers a special credit service to the people to improve the quality of their living standard. This sort of credit facilities help the government and private service holders to buy household and other appliances such as Television ,Refrigerator, car etc. People who are not in service are also entitled to get this credit facility only if a guarantor assures to pay off the full liabilities in case the client fails to repay the loan amount. The current rate of interst charged on Customer Credit Scheme is 15 % and the loan is sanctioned for not more than three years. The products bought by this loan will have a joint registration in the name of purchaser and the Bank. 5.2.1.2 House Building Loan: House Building Loans are available to the clints who have the land but ubable to build the house on the land. The approval for this type of loan requires: Valuation certificate of the Bank. Estimated cost of building and DIT permission certificate.

5.2.1.3 Syndication / Project Loan: The Bank finances large projects and constructions works of clints with outstanding credit rating. After the signing ceremony of the ceremony of the loan, the Bank arranges the loan amount by borrowing from the other banks and disburses the loan amount to the clients. 5.2.1.4 Industrial Loan: Industrial Loans are approved for the improvement of the growth of both small and cottage and medium and large scale manufacturing industries. The rate at which this type of credit facility is allowed depends on the size of the loan client status and the performance of the industry for which the loan is being sanctioned. 5.2.1.5 Lease Financing: This type of financing are usually provide the transportation sector. Now a day this Lease Financing is one of the popular financing projects. The rate at which this type of credit facility is allowed depends on the size of the loan, client status and the performance of the industry for which the loan is being sanctioned. 5.2.1.6 Loan for Salaried Person: Any Permanent salaried officer or employees aged between 20 to 50 years are usually eligible for kind of loan. An eligible person can get one to five lac taka under this loan scheme. Repayable by monthly equal installments including interst within maximum 5 years. 5.2.1.7 House Repairing and Renovation Loan:

The genuine residential owners can avail of this kind loan to repair, renovate their own house, building, flats according to their need and repayment capacity. Any owner of house aged 30 to 50 years will be eligible to get loan under this scheme. Repayment by monthly equal installments including interst within maximum 5 years. Repayment will start thr 4th month pf availing of the loan. 5.2.1.8 Festival Loan: This type of loan usually offers the shop owners who want capital for in the eve of any festivals. The repay period is three month from when the loan sanction. This loan scheme is newly introduced in National Credie and Commerce Bank Limited. 5.2.2 Continious Loan: There are two Types of continuous loan 1. Secured Over Draft 2. Cash Credit 5.2.2.1 Cash Credit (CC): A cash credit it by which the customer is allowed to borrow money up to a certain limit' This is a permanent arrangement and the customer need not draw the sanctioned amount at once, but draw the amount as and-when required. He can put back any surplus amount, which he may find with him. Thus cash credit is an active and running account to-which deposits and withdrawals affected frequently. Interest is charged only for the amount withdrawn and not for the whole amount charged. cash credit arrangements are usually. made. against pledge or hypothecation of goods. Sometimes this facility also provided against personal security. If the customer does not use the cash credit limit to the full extent, the bank makes a commitment charge' This charge^ is imposed on the unutilized portion of cash credit only. cash credit provides an elastic form of borrowing since the limit fluctuates according to the needs of the business. cash credit. are the most favorite mode of borrowing by large commercial and industrial concerns in Bangladesh. Between cc (Hypothecation) and cc (pledge) NCC sanction only cc (Hypothecation). 5.2.2.1.2 CC (Hypothecation): cash credit is sometimes allowed against hypothecation of goods. The mortgage of movable property for securing loans called hypothecation. In a manufacturing company, whose stocks of raw materials and manufactured goods constantly fluctuate, it is difficult for the bank to control such changes , so hypothecation facilities are allowed. In the case of CC (Hypo) the ownership and possession of the goods remain with the borrower. By virtue of the hypothecation agreement the bank can take the possession of the goods hypothecated , if the borrower-defaults bankers are in that case , entitled to take legal

action against the debtor not only for the debt but also for breach of trust. The letter of hypothecation creates an equitable and not a regal charge on the stocks. (I) Project Loan: NCCBL shall allow Loans for longer duration to enable its investment to be returned by way of repayment after detailed assessment and feasibility study as per its guideline for entrepreneurs and investors willing to come to an arrangement in setting up industries and different production unit complying to rules and regulations of governments Investment & industrial policy. As investment shall be for longer duration and fraught with unforeseen risks, bank shall obviously seek adequate eligible securities to cover itself. Acceptance of such securities shall be as per laid down principles of the bank and Bangladesh Bank guidelines in this regard. (ii) House Building Loan:Bank shall allow credit facilities under such portfolio strictly as per PPG within the Prudential Regulations of Bangladesh Bank for Consumer Financing. (iii) Packing Credit: This facility also relates to financing at Pre shipment stage. NCCBL shall consider such facility under defined guidelines against export of various commodities. (iv) Loan against Imported Merchandise (LIM): Loan against the security of merchandise imported through bank shall be allowed against Pledge of goods. The procedure and conditions for allowing such facility under prior arrangement or forced circumstances shall be strictly as per related guideline of the bank. Due to inherent complexities, the portfolio should be discouraged. (v) Loan Against Trust Receipt (LTR): Bank shall be selective in extending the facility but shall prefer due to comfort in binding the customer legally. Generally such facility shall be against arrangement and preferable against collateral security favoring the Bank. (vi) Transport Loan: NCCBL may extend Transport Loan on close scrutiny of the purpose, Feasibility, experience of the borrower, credit/trust worthiness and above all security aspect as per its guidelines in this regard. (vii) Lease Finance: An entrepreneur, under this scheme may avail of lease facilities to procure industrial machinery and equipments, Vehicles etc. (without having to purchase it by down payment) with easy repayment schedule on case to case basis. Rate of interest under this Scheme is 16% P.A. (viii) Payment against Documents (PAD): This facility originates against payment of Import Bills on lodgment of CLEAN shipping documents received from Foreign Correspondent against Letter of Credit opened on behalf of the customers. (viii) Festival Business Loan: The scheme designed to help the genuine businessmen to meet the extra finance required during festivals like, Eids, Puja. Disbursement of this loan is made in recycling order which is to be stopped 15 days before the festival day. Maximum Tk.10.00 lac is allowable under this Scheme @ 16% interest P.A. at quarterly rest. Application fee is Tk.500

ix) Festival Personal Loan: The scheme formulated to meet emergency financial expenses of the service holders at the time of festivals like Eids. Puja. Any salaried employee aged between 20- 50 years and working in Govt. Semi - Govt. Autonomous organization, corporate bodies, Insurance Co., etc. are eligible to avail of this loan. The disbursement of this loan starts before 1 month of festival and continues till festival. Borrower may be allowed to avail of maximum Tk. 15,000/- only for minimum 6 months but not more than 15 months @ 16% interest P. A. at quarterly rest. Application fee is Tk. 100/-. (x) NCC Bank Housing Loan Scheme: In order to enable the service holders/ profess ionals/ businessmen in purchasing Flat/House, Construction of Building and renovation, the Bank launched Housing Loan Scheme from September 2004. The tenure of the loan is maximum 12 years and maximum amount of loan is tk.50.00 lac with interest @ 16% LENDING AUTHORITY As sure proper and orderly conduct of the business of the Bank, the Board of Directors' will empower the Managing Director and other Executives of the Bank to lend up certain amount under certain terms and conditions at their discretion. The lending officer is broadly categorized as follows: Managing Director Deputy Managing Director Executive vice President Asst. Senior vice President Vice President Senior Asst. vice President Asst. Vice President.

It must be emphasized that an Officer will not be delegated lending authority only on the basis of his position. Specified lending authority will be delegated by the Managing Director to various Executives after taking into consideration his proven credit judgment, knowledge and experience. The amount of lending authority approved by the Board for various Executives form the upper limits of the authority that may be delegated to an officer holding corporate title. Each individual lending authority will be delegated to him in writing. The managing Director with the Executive Committee/ Board will review all lending authorities periodically. 4.4.5 CIB Bangladesh Bank has established within itself a Credit Information Bureau (CIB), which collects credit information from the banks. Banks are required to furnish such information in respect of credit limit of Tk.50000 and over. They mention the Name of facility, security and charge along with outstanding balance. After consolidating such information in respect of each customer the central bank supplies to the total limits sanctioned to and the number of banks dealing with a party. Thus the banks can find out

if any of their customers is having excessive borrowings from the banking system at any particular time. 4.4.6 LOAN CLASSIFICATION Loan classification is a process by which the risk or loss potential associated with the loan accounts of a bank on a particular date is identified and quantified to measure accurately the level of reserves to be maintained by the bank to provide for the probable loss on account those risky loan. Like other banks, all types of loans of NCC BANK fall into following four scales: Unclassified: Repayment is regular. Substandard: Repayment is stopped or irregular but has reasonable prospect of improvement. Doubtful debt: Unlikely to be repaid but special collection efforts may result in partial recovery. Bad/ Loss: Very little chance of recovery.

4.4.7 SECURITIES 1. Primary security: These are the security taken by the ownership of the items for which bank provides the facility. 2. Collateral security: Collateral securities refer to the securities deposited by the third party to secure the advance for the borrower in narrow sense. In wider sense, it denotes any type of security on which the bank has a personal right of action on the debtor in respect of the advance. 4.4.8 DOCUMENTATION Documentation can be described as the process or technique of obtaining the relevant documents. In spite of the fact that banker lends credit to a borrower after inquiring about the character, capacity and capital of the borrower, he must obtain proper documents executed from the borrower to protect him against willful defaults. Documents contain the precise terms of granting loans and they serve as important evidence in the law courts if the circumstances so desire. Thats why all approval procedure and proper documentation shall be completed prior to the disbursement of the facilities. 4.4.9 CREDIT DISBURSEMENT Having completely and accurately prepare the necessary loan documents, the loan officer ready to disburse the loan to the borrowers loan account. After disbursement, the loan needs to be monitored to ensure whether the terms and conditions of the loan fulfilled by both bank and client or not.

4.4.10 ADMINSTRATION/MONITORING The administration of the loan process shall ensure. Compliance with all laws and regulations at both local and global levels including bank policy as set out in this document and the Banks credit manual/ circulars. Proper analysis of credit proposal is complex and requires a high level of numerical as well as analytical ability and common sense to ensure effective understanding of the concepts and thus common sense. Bank healthy proper staffing of the credit departments shall be done through placement of qualified officials who have got the right aptitude, formal training in finance, credit risk analysis, Bank credit procedures as well its required experience. Where repayment and interest servicing performance of a credit deteriorates shall be identifies at an early state and closely monitored to avoid low losses.

BANK OF CHINA
Packing Loan A special loan offered by the local bank to the exporter who has received qualified letter of credit, to be used under items of procurement, production and shipment, so as to support the exporter to implement the contract, effect delivery as scheduled. Packing loan is a pre-loading short-term financing, which enables the exporter to purchase, prepare the material, produce and trade without difficulty even the self-owned capital is not sufficient. Why to choose packing loan? Expand trade opportunities In case the exporter is short of self-owned capital, and has no way to procure the prepayment, the packing loan will help the exporter to develop business and grasp the trade opportunity successfully. Reduce the occupied capital Free the exporter from using its self-owned capital at the stages of goods preparation such as production, purchase and etc, relieve the pressure of work capital of the exporter. When to choose packing loan? The exporter is short of work capital, and the foreign importer agrees to open L/C without acceptance of prepayment terms. How to handle packing loan operation? The Operation flow

Attentions 1. When applying for packing loan, the exporter should submit to the bank: a. Written application; b. Foreign sales contract and domestic purchase contract; c. Introduction of the trade ; c. Origin L/C. 2. The exporter should sign formal Loan Contract (Packing Loan) with the bank. 3. The financing bank should be the advising bank of the L/C and it can negotiate and pay. 4. soft clauses that the exporter has no way to fulfill shouldnt be included in the L/C. 5. After application of packing loan, the origin L/C should be retained in the financing bank. 6. In normal cases, the received remittance should be deemed as first resource to repay the packing loan . 7. Upon goods shipment and obtaining documents under L/C, the exporter should present the documents to bank for negotiation as soon as possible. ADVANTAGESAdvantages of Bank of China Predominant credit BOC has a long history of over 90 years and has been awarded the Best Bank in China by Euromoney for successively 8 times. With the progressively improved system of corporate governance, overall integration of operation flow, wholly-upgraded service efficiency and rich financial products, BOC has continued to advance toward its goal of becoming a leading universal international bank; Reform with keen determination Attentions have been paid to the intermediate businesses, especially the strategy of developing various trade financing. Ample capital A Chinese-invested bank with the strongest foreign exchange capital power with a constantly increasing Renminbi capital power, sufficient capital to handle this business for the clients. Preferential price Provide the most beneficial financing plan as per the interest rate on the market, help the clients lower the financial expense to the largest extent. Accreditation support Earliest among domestic commercial banks to implement the unified credit system, and has designed diversified credit extension method for trading finance. Syndicated Loan

Introduction The syndicated loan is a financing method evolved from bilateral loan. Under the arrangement of syndicated loan, one bank or several banks (as the arrangers) organize other banks to grant loans to the same borrower under one loan agreement according to agreed terms. Syndicated loans have the following features: Huge amount, long term; fewer restriction on the use of proceeds (compared with government loans and export credit); easier management (compared with loans borrowed separately from different banks); less pressure on banks; diversified risk. As for the borrower, syndicated loans provide large amounts of loans with longer term and easy operation management (only need to contact with the agent bank). Eligible Applicants 1.According to the national industrial policies and economic development plan of the local government, syndicated loans are focused on energy, transportation, hi-tech industries and regional key projects. 2.Eligible applicants include corporations incorporated within China's territory or other economic organizations approved by the banks (referred to as the borrower) that comply with General Rules on Loans and Interim Regulation on Syndicated Loans. Application Materials The requirement is the same as for either working capital loan or term loan. Application Procedures: 1.The client manager of BOC pays attention to client's demand for financing. 2.The bank receives the client's loan information/bidding documents for financing. 3.The bank discusses the loan provisions and financing structure with the client, and draft the related documents. 4.BOC is duly designated as the lead bank/underwriter for the syndicated loan. 5.BOC confirms the amount of credit. 6.The syndicate timetable, strategy and make-up are defined. 7.The loan memorandum and invitation to the syndicate are prepared, related financial institutions are invited.

8.The participating banks make commitment on their subscription. 9.The credit lines of the participating banks are finalized. 10. All parties reach consensus on the loan agreement and guarantee agreement. 11. The agreement is signed. 12. The agent bank is responsible for the routine work. Credit to Real Estate Businesses Introduction Credit to Real Estate Businesses is a financial product applicable to businesses engaged in real estate development and operation. The loan borrowers may include qualified real estate developers or real estate operators that intend to buy newly built and/or stock residence and office estate, and release the acquired property for a certain years. All the Corporate Banking Department in BOC domestic branches may accept the applications for such loans. Business Assortment In term operational modes, the credit to Real Estate Business are divided into two kinds. One is for the real estate development business and the other is for the real estate operation. The credit to real estate business includes loans for residence development, commercial property development and lands development. And the latter includes loans for acquisition and operation of property. In the latter case, a real estate developer or an operator borrows loans to develop or operate certain projects and loans are repaid mainly with the proceeds from the projects. This category includes residence development loan, commercial property development loan, and lands development loan and property acquisition and operation loan. Eligible Applicants Residence development loan is intended for real estate developers that develop residence either for sale or rent, including affordable and functional housing, and commercial housing for all market segments. Applicant of commercial property development loan may be the real estate developer that develops office buildings and retail outlets either for sale or rent. Land development loan may be borrowed by institutions or corporations assigned by the government to develop, manage or transfer undeveloped lands.

Property acquisition and operation loan borrowed by corporations for purchasing newlybuilt or stocked property for lease. Application Qualifications Applying for residence or commercial property development loans 1.The applicant should be a real estate developer that has been approved by the State Real Estate Administration and has registered with the Industrial and Commercial Administration, obtained a Business License and passed the annual review and obtained the certificate of qualifications issued by related authorities; 2.The developed residence projects of the applicant fit for his qualifications. 3.The applicant has obtained a valid loan card/certificate issued by the local office of the People s Bank of China. 4.The use of the loans should comply with the national industrial policies and related laws and regulations. 5.The applicant should have sound governance mechanisms, qualified management and strict managerial control system. 6.The applicant should have sound operational, financial and credit conditions and adequate solvency. 7.The applicant should secure loan guarantee in a way approved by BOC. 8.The applicant should open a basic account or ordinary deposit account in BOC, and have deposit and settlement business in BOC. 9.The applicant has assigned a State-owned Land Use Right Remise or Assignment Contract or a State-owned Land Use Right Transfer Contract, obtained the approval for the land use and started construction within the timeframe set by the contract, and the expiration of the contract may not be earlier than the expiration of the term of loan. 10. The applicant has completed the application procedures for the development and obtained related documents (if applicable), including construction land planning permit, construction project planning permit, construction commencement permit, etc. All the related documentation should be complete, authentic and valid. 11.The actual use of the project should be in consistence with its planned purpose, that the project should have good market prospects.

12.The construction budget and plan should comply with related regulations promulgated by the national and local governments; the total budgeted investment has taken into consideration inflation and other unforeseeable elements that may require additional financing. 13.The self-contributed funds should account for at least 35% of the total budgeted investment and be used in the construction before the loans are available; Applying for land development loans 1.The applicant is a legal entity of institution entrusted by the government. 2.The project should consist with the applicants qualifications and the local government should approve the relocation of the original residents. 3.The applicant has obtained a valid loan card/certificate issued by the local office of the Peoples Bank of China. 4.The use of the loans should comply with related national industrial policies and regulations. 5.The applicant should have sound governance mechanisms, qualified management and strict managerial control. 6.The applicant should have sound operational, financial and credit conditions and has adequate solvency. 7.The applicant should secure loan guarantee in a way approved by BOC. 8.The applicant should open basic account or ordinary account in BOC and have deposit and settlement business with BOC. 9.The applicant has signed a contract of the State-owned Land Use Right Remise or Assignment, or a State-owned Land Use Right Transfer Contract, and obtained the approval for the land use and started construction within the timeframe set by the contract. The expiration of the contract may not be earlier than the expiration of the term of loan. 10.The applicant has completed the application procedures for the development and obtained related documents (as local governments stipulated); the applicant should have complete, authentic and valid documentation. 11.The land to be developed is well planned and has good prospects for transfer. 12.The construction budget and plan must comply with related regulations promulgated by the national and local governments; the total budgeted investment has taken into

consideration inflation and other unforeseeable elements that may require additional financing. 13.The self-contributed funds must account for at least 35% of the total budgeted investment and be used in the construction before the loans are available. Project Financing Introduction Project financing refers to the practice that the sponsor (i.e. shareholder) of a project which establishes a project company borrows loans in the name of the company, uses the cash flows and revenues of the company to repay the loans and leaves the assets of the company as the guarantee. This financing mode is commonly applied to large-scale infrastructure projects which generate steady cash flows, such as power generation, roads, railways, airports, bridges, etc. The scope of application is expanding to some other areas such as big petrol chemical projects. There are two forms of project financing: 1.Project financing without recourse Project financing without recourse is also referred to as pure project financing. In this form of financing, repayment of the interest and principal of the loans solely depends on performance of the project operation. At the same time, the lending bank acquires property right of the project assets as collateral for the loan. If the project fails to be completed or suffers operational losses, and if its assets or proceeds are inadequate to repay all the loans, the lending bank will have no recourse to the sponsor of the project. 2.Project financing with limited recourse In this form of financing, with operational revenue stream of the project as the source of repayment and property right as guarantee, the lending bank also requires a third party to guarantee the loans. Thus the lending bank has recourse to the third party guarantor. But the guarantor is only liable to the amount of guarantee. So it is referred to as project financing with limited recourse. Application Qualifications 1.The project has been approved by competent government authorities. 2.The feasibility study report of the project has been reviewed and approved by related government authorities. 3.The introduction of foreign technology, equipment, patents and so on have been approved by the economic and foreign trade authorities.

4.Project production has reliable source of raw materials and the material supply contract or letter of intent is available. 5.The project company can provide guarantee on the completion of the project and financial arrangement for over-expenditure of capital construction cost to the creditor, and agrees to transfer the insurance interests to the creditor ,and mortgages the construction in progress or the already-built fixed assets as well as pledges the proceeds made from the project to the creditor. The shareholders of the projects agree to pledge their equity rights to the creditor. 6.Products of the project has good marketing channel preferably with "take or pay" purchases and sales contracts. 7.Products of the project are expected to have sound market prospects and good potential of development and profitability. 8.The land use right of the project has been secured. Water supply, power supply, communications and other support facilities are available. Required Materials 1.Approval of the feasibility study report issued by related government authorities; 2.Approval of the environment authorities; 3.A foreign invested enterprise must provide the official written approval of the joint venture contract and articles of association issued by the Ministry of Foreign Trade and Economic Cooperation; 4.A copy of the business license; 5.The tax registration license?national tax and local tax??; 6.A copy of the institution reference code certificate of the People's Republic of China; 7.A copy of the foreign currency registration certificate (foreign-invested enterprise??; 8.Construction land planning permit, construction project planning permit, etc.; 9.Identity certificate of legal representative; 10. Loan card. 11. "take or pay" purchase and sale contracts, material supply contracts, completion guarantee, plan for overspent costs, transfer of insurance interests, mortgage of

construction in progress or already built fixed assets, pledge of the project's usufruct and shareholders' equity right. Application procedure 1.The project company submits an application for project financing to the Corporate Banking Department of any branches or head office of BOC. 2.The bank and the project company negotiate and reach agreements on the arrangements of "take or pay " purchase and sale contracts, material supply contracts, completion guaranty, arrangements for overspent costs, transfer of insurance interests, mortgege of construction in progress or already built fixed assets, pledge of the project's usufruct and shareholders' equity right, and other financing arrangements. 3.The bank reviews the application according to the credit approval procedure. 4.Upon approval, the project company negotiates on the text of financing contract with the lending bank. 5.The agreement is executed and the loan is available for withdrawal. Foreign Currency Loans Introduction The Foreign Currency loan of BOC is raised by the Bank on its own and granted to enterprises. Currencies of the loans include US dollar, Euro, pound sterling, Japanese yen and Hong Kong dollar. Both the fixed rate and the floating one which is decided with reference to LIBOR plus comprehensive cost of the bank's financing and relevant profits, are acceptable for the loans. To meet the customers' requirement, BOC can swap the floating rate into fixed one. Compared with foreign government loans and Export Credit, foreign currency loans have diversified uses in equipment and material purchase, etc.. Business lines Foreign currency loans of BOC meet the enterprises' need in working capital requirement as well as fixed asset investment.,and vary the term of loan as short-term, medium-term and long-term.. Eligible Applicants Foreign currency loans of BOC are only extended to enterprises. Any legal entity with account in BOC and the ability to repay can apply for foreign currency loans. Application Qualifications

1.The borrower should be an enterprise or institutional legal entity, or other economic organization or an individual industrial and commercial household registered after verification and ratification of the industrial and commercial administrative organs (or competent authorities), and should bear a "Business License for the Enterprise Legal Entity" issued by the industrial and commercial administrative departments; 2.The loans must be used for due and reasonable purposes and can bring economic benefits; 3.The borrowers shall have relevant sources of foreign currency. If the borrowers have no foreign exchange income, they shall be authorized bythe foreign exchange administrative organto purchase foreign exchange for the repayment; 4.Conform to other BOC regulations on loans. Required Materials 1.Application for loans; 2.A certificate of the legal representative and a letter of authorization, resolution of the board of directors and the statute of the company; 3.Business license of the legal entity verified in the annual check (copy files accepted); 4.Audited financial statements of the borrowers for the last three years and recent financial statements; 5.Certificate of Loan; 6.Other documents and certificates required by BOC. Application procedures Borrowers should submitapplication to the Corporate Banking Department of BOC, with required documents and materials ; BOC examines and verifies the application materials and requires further supplementary materials if necessary; After the internal approval, BOC signs loan contract with the borrower; Before the borrower can draw money according to the loan contract, it shall first fulfil preconditions for the withdrawal and register with the foreign exchange administration.

Fixed Asset Loan

Business summary Fixed Asset Loan refers to loans granted by BOC to meet the demands of enterprises in their investments in fixed assets. Investments by enterprises in fixed assets include capital construction, technical innovation, developing and manufacturing of the new products as well as related house purchase, civil engineering, purchase and installation of the technical equipment, etc. Business assortment Fixed Asset Loan is divided into Long-term Loan, Temporary Circulating Loan and Foreign Exchange Loan based on the following purposes. Capital Construction: Which refers to infrastructure, municipal works, service facilities, new or enlarged productive projects ratified and approved by the authorities concerned of the state. Technical Innovation: Which refers to the technical innovation items aimed at the expanded reproduction by the existing enterprises. Scientific and Technological Development: Which refers to the activities concerning research, manufacturing and development of the new technologies and products and with regard to the transformation or application of the development results in the production field. Other Purchases of the Fixed Assets: Which refers to the direct purchase of houses or facilities not built by the enterprise itself for the use of production, storage and official business. Applicant The enterprise legal entities, institutional legal entities and other economic organizations registered upon verification and ratification of the Industrial and Commercial Administrative organs (or competent authorities) and involved in independent accounting. Qualifications for Application 1.The applicant must bear the Business License that has passed the annual examination of the Industrial and Commercial Administrative Departments and the institutional legal entity must bear documents certifying its legal status. 2.The applicant should bear the Permit or Card for Loan verified and issued by the People's Bank of China.

3.The applicant should have good economic effects, a good creditability, and a strong capability to repay debt and a complete and excellent management system. 4.The applicant should fulfill guarantees acknowledged by BOC. 5.The applicant should open basic account or ordinary deposit account in BOC. 6.The fixed asset loan items should comply with the State industrial policies and credit policies. 7.The applicant must possess a proportion of capital stipulated by the state. 8.The project has been examined and approved by the governmental departments concerned, with complete auxiliary conditions and ready sources of supply of equipment and materials from abroad. 9.The applicant must bear import instrument or import registration documents in case of applying for foreign exchange fixed asset loans. Applying Procedures 1.The borrower should submit a written borrowing application to BOC. 2.The borrower should submit the required relevant documents to BOC, which including the Business License, Company Regulations, financial annual reports for recent three years, documents for establishment of the project on file and documents of comment and reply, analysis of the project economic benefits and plans for use and repayment of the loans, etc. 3.BOC may make pre-loan investigations and evaluations, look into the credit level of the borrower as well as into the legitimacy, safety and profitability in the borrowing, verify and examine the pledges, properties and guarantors and form the views on evaluations. 4.Upon confirmation after inner-bank review and examination, both parties will agree with the terms and conditions stipulated in the borrowing contract, the mortgage contract and the guarantee contract and all sides concerned would conclude the contracts. 5.The borrower will go through the relevant formalities such as the registration of the contracted mortgage. 6.The borrower will present an application for drawing money. 7.The funds will be transferred into the borrower s bank account for use.

Petty Consumer Credit(Loans)

Petty consumer credit loans of the Bank of China are consumer credit loans granted by the lender to borrowers with good credit standing to facilitate normal consumption, labor service and other fee payments. Lending Conditions A borrower (natural person) applying for petty consumer credit loans of the Bank of China must meet the following conditions: 1.Being a natural person aged 18-60 with full capacity of civil conduct; 2.Having city/town registered permanent residence or a valid residence permit; 3.Having a legitimate occupation and a stable income, and having the capacity of repaying the loan principal and interest accrued on schedule; 4.Having opened a demand account or Great Wall credit card account with the Bank of China; 5.The personal credit is evaluated and accepted by the lender. For a holder of the Great Wall golden card of the Bank of China or a holder of the Great Wall ordinary card for two years or more, separate evaluation of personal credit is unnecessary; and 6.Other conditions made by the lender. Length of Maturity The longest maturity of a petty consumer credit is one year. Credit Limit The maximum borrowing limit of a petty consumer credit is temporarily set at RMB100,000. Lending Rate To the interest rate for petty consumer credit loans, the interest rate for loans of the same grade set by the People's Bank of China applies. Upward fluctuation of the interest rate shall not surpass the range provided for by the People's Bank of China. Loan Application

The application by the borrower to the lender for a loan, shall be supported by the following materials: 1.An application for borrowing; 2.Valid credentials of the borrower (referring to an I.D. card, a residence booklet and other valid residence certificates); 3.Testimonials of occupation and income (an employee's card and a pay sheet, or a passbook for salary payment through an agency or other valid certificates); 4.For a Great Wall card holder, his credit card to be produced; and 5.Other documents or materials required by the lender. Personal Loan Secured by CDs/Treasury Bonds

Personal loan pledged by certificates of deposit (CD) /treasury bonds is a kind of business combining deposit and loan in which the client gets a certain amount of Renminbi loan from the bank by pledging undue certificate(s) of time deposit and also repays the principal and interest accrued on schedule. CDs used for hypothecation are limited to certificates of time deposits issued by the savings outlets in the local administrated area of the tier-one branches of and branches under the Bank of China. Prospective Borrowers Any resident in China with full capacity for civil conduct, holder of undue certificates of time deposit in local or foreign currencies issued by the Bank of China or treasure bonds, may apply for a personal loan pledged by CDs/treasure bonds to the Bank. A borrower applying for personal loan pledged by CDs/treasury bonds must also meet the following conditions: 1.Being a natural person with full capacity of civil conduct; 2.Having local registered permanent residence or valid credentials; 3.Being a holder of undue certificate(s) of time deposit or treasure bonds issued by the Bank of China; 4.Other conditions provided for by the lender.

Length of Maturity The length of maturity of a personal loan pledged by CDs/treasury bonds may not exceed the due date of the pledged CD . Besides, the longest maturity shall be one year. If multiple certificates of personal deposit are pledged, the length of maturity shall be set according to the nearest due date. For automatic renewal certificates of deposit, the length of maturity shall be set according to the length of automatic renewal. Lending Rate The interest rate for loans of the same grade announced by the People's Bank of China applies to the interest rate for personal loans pledged by CDs/treasury bonds. The interest rate shall not float beyond the ceiling rate specified by the People's Bank of China. If the length of maturity is less than six months, the interest rate shall be that for the six month loan. For repayment before maturity date, the interest shall be calculated according to the originally set interest rate and the actual number of days of borrowing. In case the People's Bank of China adjusts the interest rate, the contracted interest rate is still adopted within the length of maturity. Lending Purpose Borrowers may use the loans for purchases of houses, cars and expensive consumer durables, for house refurbishing, vacation and travel, education and other consumer demands, as well as for working capital demand in normal operations. Credit Limit The minimum amount of a personal loan pledged by CDs/treasury bonds is RMB1,000. The amount of the loan shall in principle not exceed 90% of the face value of the pledged CD (for deposits in foreign currencies, calculated in Renminbi translated at the current day buying rate of foreign exchange [bank note]). The maximum borrowing limit of a single loan shall in principle not exceed RMB3,000,000. Loan Application The application for a personal loan pledged by CDs/treasury bonds shall be supported by the following materials: 1.An application for personal loan pledged by CDs/treasury bonds; 2.Presentation of valid original credentials of the borrower, pledgor(referring to I.D. card, residence booklet and other valid residence certificates), and also provision of their duplicates;

3.Valid original certificate(s) of personal time deposit issued by the Bank of China; 4.Signature or password for the certificate(s) of deposit held by the borrower; 5.Other documents of certification or materials required by the lender. Loan Repayment The borrowers may use cash or deposits with the Bank of China for debt service. With the consent of the lender, the borrowers may repay the principal and interest of the loans ahead of schedule.

Consumer Durables Loans

Large consumer durables refer to Renminbi loans granted to individual consumers to facilitate purchases of expensive consumer endurables. Expensive consumer endurables refer to household endurable commodities with a unit price of 3,000 yuan or higher and a normal service life of more than two years, including household electrical appliances, computers, furniture, body-building apparatus, sanitary tools, musical instruments, etc. (excluding cars and houses). Large consumer durables loans may be used only for expensive consumer endurables operated by tied sellers that have entered into related agreements with the lender and undertake installment payment business. Prospective Borrowers A borrower applying for large consumer durables loans must meet the following requirements: 1.Being a natural person aged 18-60 with full capacity of civil conduct; 2.Having a legitimate job and stable economic income, and having the capacity of repaying on schedule the loan principal and interest accrued; 3.Having assets approved by the lender for mortgage or pledge, or having an individual or institution with adequate capacity for repayment by subrogation that commits itself to repay the loan principal and interest accrued and also hold joint and several liability;

4.The purpose for purchasing the commodity is for the borrower's, or his or her family's use; 5.Having good credit, and also having the sincerity to make repayment by installment or by lump sum; and also having opened a Great Wall credit card account or demand deposit account with the Bank of China; and 6.Other requirements raised by the lender. Length of Maturity The length of maturity of large consumer durables loans is usually within one year, with the longest up to three years (or shorten). For a borrower close to the age of retirement, the length of maturity may not exceed the age of retirement (usually 55 for a woman and 60 for a man). Interest Rate The interest rate for large consumer durables loans shall be the rate for loans of the same grade stipulated by the People's Bank of China, and the interest rate shall fluctuate upwards in line with the regulations of the People's Bank of China. If the length of maturity is within one year, interests shall be computed at the contracted interest rate, and they shall remain unchanged in case of the adjustment of the legal interest rate; if the term of one loan is over one year, in case of adjustment of the legal interest rate, a new interest rate shall be adopted in accordance with the relevant grade of interest rate as from the beginning of the following year. Lending Currency Renminbi. Borrowing Limit The credit lines for large consumer durables loans range from RMB2,000 to RMB100,000. The down payment of a borrower in purchasing expensive consumer goods shall not be less than 20% of the total value of the purchase, and the amount of borrowing may not exceed 80% of the total value of the purchase. Loan Guarantee In applying for large consumer durables loans, the borrower must provide the lender with an effective guarantee in the form of guarantee, mortgage or pledge. 1.If the borrower applies for the loan in the form of guarantee, a Guarantee Contract shall be signed between the guarantor and the lender before the loan is granted, and the guarantee of joint and several liability shall be made clear in the said guarantee.

2.If the borrower applies for the loan in the form of mortgage, a Mortgage Contract shall be signed between the mortgagor and the lender; if procedures of registration of mortgaged property need to be handled according to laws and regulations, they shall be completed before the loan is granted. 3.If the borrower applies for the loan in the form of pledge, a Pledge Contract shall be signed between the pledgor and the lender; if the lender deems it necessary to handle registration procedures for the pledged property, the procedures shall be completed before the loan is granted. If the borrower uses bonds or certificates of deposits to create a pledge interest, procedures of pledged property registration are unnecessary. Loan Application The application by the borrower to the lender for a loan shall be supported by: 1.An application for borrowing; 2.Valid credentials of the borrower (referring to I.D. card, residence booklet and other valid residence certificates); 3.Certificates of job and income (employee's card and pay sheet, or passbook for payment on commission or other valid testimonial); 4.Purchase agreement, contract or certificate of payment; 5.Sheet of mortgaged or pledged property, certificate of ownership, certificate of evaluation, written opinion of the guarantor agreeing to guarantee, and certificate of credit status of the guarantor; 6.Other supporting documents or materials required by the lender. Method of Repayment 1.The borrower shall open a current account with the Bank of China, and according to the repayment plan provided in the contract, deposit money sufficient for the current repayment of the loan and the interest accrued in the current account prior to the day of repayment and also authorize the lender to withhold the right of deduct -ing the amount from the account on schedule. 2.Within the borrowing time limit, the borrower may, according to the methods of repayment provided by the lender, repay the principal and interests of the loan by installment or by lump sum in full. 3.With the consent of the lender, the borrower may service the debt ahead of schedule.

Travel and Vacation Loans

Travel and vacation loans refer to loans granted to individual consumers to facilitate their outlays for travel in and outside China organized by various kinds of travel services (companies) approved by the lender. Prospective Borrowers Chinese citizens aged 18 and above and also with full civil conduct capacity. Besides, such a borrower applying for a travel and vacation loan must meet the following conditions: 1.Being a natural person with full civil conduct capacity; 2.Having local registered permanent residence or valid residence identification, and having a fixed and specific address; 3.Having assets approved by the lender for mortgage or pledge guarantee, or having an individual or institution with adequate capacity for repayment by subrogation, approved by the lender, that commits itself as guarantor to repay the loan principal and interest accrued and also holds joint and several liability; 4.Must choose a credit-honored and high-rating travel company that is approved by the lender; 5.Other requirements raised by the lender. Length of Maturity The length of maturity of travel and vacation loans is usually one year, with the longest not exceeding three years. Lending Rate The interest rate for travel and vacation loans shall be the rate for such loans of the same grade announced by the People's Bank of China. The interest rate shall not fluctuate upward beyond the ceiling set by the People's Bank of China. Lending Currency

Renminbi. Credit Limit The minimum amount of initial payment for vacation and travel consumption of the borrower is 30%. The specific borrowing limit may be decided on in line with the local consumption level and guarantee conditions, but in principle it may not exceed 70% of the total amount of the vacation and travel consumption. The maximum amount of such a loan may in principle not exceed RMB100,000. Loan Guarantee In applying for a travel and vacation loan, the borrower must provide the lender with an effective guarantee in the form of guarantee, mortgage or pledge. 1.If applying for the loan in form of guarantee by a third party received by the lender, the borrower shall provide guarantee of joint and several liabilities. A Guarantee Contract shall be signed between the guarantor and the lender. The guarantee provided under the Guarantee Contract refers to the performance guarantee on which an insurance is taken out by the borrower through an insurance company. 2.If applying for the loan in the form of mortgage, the borrower or mortgagor must conduct the procedures of mortgage registration, as agreed upon in the conduct and purchase an insurance on mortgage property in the insurance company designated by the lender, with the premium being not less than the sum of the principal and interest of the loan and the insurance expiry date not shorten than the maturity date of the loan. The lender shall be the first beneficiary covered by this mortgage insurance. The original of the policy must be in the custody of the lender. 3.If the borrower applies for the loan in the form of pledge, a Pledge Contract shall be signed between the pledgor and the lender; if the lender deems it necessary to handle registration procedures for the collateral security, the procedures shall be completed before the loan is granted. If the borrower uses bonds or certificates of deposits to create security right, registration procedures of collateral security are unnecessary. 4.Prior to the making of the loan, the borrower and the lender should go to the notary office for handling the procedures of the relevant contract notarization, if the lender deems it necessary. Loan Application In applying for a travel and vacation loan, the borrower shall file a written application and also present the following materials to the lender: 1.An application for a travel and vacation consumption loan;

2.Presentation of valid original credentials of the borrower (referring to I.D. card, residence booklet and other valid residence certificates), and also provision of their duplicates; 3.Detailed list of property used for mortgage or pledge, or letter of commitment by a third party that agrees to make a joint and several liability guarantee; 4.Relevant agreement signed with the travel company; and 5.Other supporting documents of certification or materials required by the lender.

Loans for Refurbishing Houses

Loans for refurbishing houses refer to Renminbi consumer loans granted by the lender to borrowers to facilitate their own house refurbishing. Prospective Borrowers Chinese citizens aged 18 and above and also with full capacity for civil conduct. Besides, such a borrower applying for a loan for refurbishing houses must meet the following conditions: 1.Being a natural person with full capacity for civil conduct; 2.Having local registered permanent residence permit or valid residence permit, and having a fixed and specific address; 3.Having a legitimate occupation and stable reliable economic income, good credit standing, and the capacity of debt service on schedule; 4.Having, in principle, the house refurbishing agreement or contract signed with the refurbishing enterprise approved by the lender, and the statement of budget for the refurbishing project; 5.Providing property mortgage or pledge or third party guarantee approved by the lender. The guarantor shall be an individual or unit that is approved by the lender, have the capacity of subrogation, and shoulder joint and several liability;

6.Having a certificate of deposit that is not less than 30% of the total amount of the house refurbishing with the bank designated by the lender, or a certificate proving that the borrower has raised and paid over 30% of the house refurbishing amount; 7.Implementing other lending conditions provided by the lender. Length of Maturity The length of maturity of a loan for refurbishing houses is usually one to three years, with the longest not exceeding five years inclusive. The specific length of maturity depends on the nature of the borrower. Lending Rate The corresponding lending rate stipulated by the People's Bank of China applies to that on loans for refurbishing houses. If the length of maturity is within one year inclusive, interest amount shall be computed in accordance with the contracted interest rate, and the interest rate shall remain unchanged in case of adjustment of the legal interest rate; if the term is over one year, the interest rate shall be subject to interest rate adjustment, if any, made by the People's Bank of China. Borrowing Limit The ceiling of a loan for refurbishing houses shall not exceed 80% of the total house refurbishing amount. Loan Application In applying for a loan for refurbishing houses, the borrower shall file a written application to the lender, fill in the related application form and also provide the following documents, certificates and materials: 1.I.D. cards of the borrower and the spouse, residence booklet and other original valid residence credentials; 2.Testimonials of fixed occupation and stable economic income approved by the lender; 3.For expensive luxury refurbishing, provision of the refurbishing agreement or contract signed with the refurbishing enterprise approved by the lender and the statement of budget for the refurbishing project is necessary in principle; 4.If property is used for mortgage or pledge, provision of a detailed list of the mortgaged or pledged property by the way of security and the commitment or statement agreeing to the mortgage or pledge duly signed by the person entitled to disposal (including the co-owner of property) is necessary. For the mortgaged

property as security, an evaluation report issued by the competent department and the insurance document issued by the insurance company shall be provided, and for the pledged property, a document of ownership certification shall be provided. If a guarantee is provided by a third party, a written document agreeing to guarantee by the guarantor and the related credit certification materials shall be provided. 5.Certificate of deposit with the Bank of China that is not less than 20% of the total refurbishing amount or a certificate of payment that over 20% of the sum total in refurbishing project has been paid; 6.For expensive luxury refurbishing, provision of a business license (duplicate) and a certificate of qualifications and credit records (duplicate) of the refurbishing enterprise is necessary in principle; 7.Other documents or materials of certification required by the lender.

Educational Loans

Educational loans include commercial educational loans and state educational loans with fiscal interest discounts. Commercial educational loans refer to consumer loans granted by the lender to borrowers to finance the tuition and miscellaneous fees (including the traveling expenses for going abroad) of the borrowers or the persons under their legal guardianship in studying at domestic secondary schools or ordinary higher learning institutes or for master's or doctor's degree, or studying at universities or for master's or doctor's degree outside the territory with approval. State educational loans refer to educational loans granted by the lender to borrowers that are given fiscal interest discounts by the central financial authorities or local financial sector, and are used for the tuition and miscellaneous fees, lodging and living expenses of the borrowers in studying at domestic higher learning institutes for full-time undergraduate, professional or graduate courses. State educational loans belong to credit loans and enjoy a 50% fiscal interest discount, and their applicants must meet the condition that the involved schools have access to state educational loans. Loans for studyingd abroad are currently limited to commercial loans. Commercial Educational Loans Prospective Borrowers

1.Natural persons with full capacity for civil conduct; 2.Having permanent residence or valid residence permit, and holder's own passport or border pass if studying at a college abroad; 3.Having the enrollment notification or letter of offer from the school for study, student's identity card, and having the materials of certification on necessary tuition and miscellaneous fees during the period of study provided by the school for study; 4.Providing asset mortgage or pledge that is accepted by the lender or a guarantee provided by a third party guarantor that has the capacity of repayment by subrogation and also holds joint and several liability; 5.The borrower already has a certain proportion of the money needed by the educated persons. Length of Maturity The length of maturity of an educational loan is usually one to six years, with the longest not exceeding ten years inclusive. The specific length of maturity depends on the study conditions of the borrower and the nature of guarantee. Lending Rate The interest rate for loans of the same grade stipulated by the People's Bank of China applies to the lending rate for educational loans. If the length of maturity is one year or shorter, interest shall be computed in accordance with the contracted interest rate, and the contracted interest rate shall remain unchanged in case of adjustment of the legal interest rate; if the length of maturity is over one year, in case of adjustment of the legal interest rate, the interest rate shall be subject to the adjustment by the People's Bank of China. Lending Currency Renminbi. Borrowing Limit The ceiling of an educational loan shall in principle not exceed 80% of the total amount of tuition and miscellaneous fees. Loan Guarantee There are three loan guarantee modes, namely, mortgage, pledge and guarantee.

1.If a loan is applied by mortgaging a house or other real estate, the rate of mortgage is 70% of the evaluated value, but the loan may not exceed 80% of the total amount of tuition and miscellaneous fees. 2.If a loan is applied by pledging certificates of deposit or registered treasury bonds, the rate of pledge for certificates of deposit or registered treasury bonds is 90%, and for certificates of deposit issued by other banks or other pledged security, the rate of pledge depends on the value of the pledge security, but the loan may not exceed 80% of the total amount of tuition and miscellaneous fees. 3.If a loan is applied in the mode of third party guarantee, the ceiling of borrowing may not exceed 70% of the total amount of tuition and miscellaneous fees. But it may be raised to 80% in case of joint and several liability guarantee provided by a bank or an insurance company. Loan Application In applying for an educational loan, the borrower shall file a written borrowing application to the lender, fill in related application forms and also present the following documents and certification materials: 1.I.D. cards of the borrower, the original of valid residence certificates, , or the original of passport or pass of the educated person and its duplicate for file keeping in case of studying abroad; 2.Enrollment Notification of the school for study or student's identity card, and materials of certification drawn by the school for study on the total amount of tuition and miscellaneous fees needed by the educated persons during the period of study; 3.If property is used for mortgage or pledge, necessary id provision of a detailed list of the mortgaged or pledged property and the commitment or statement agreeing to the mortgage or pledge by the person entitled to the disposal (including co-owner of property) with his/her signature thereon. For mortgaged property, an evaluation report issued by the competent department and the insurance document issued by the insurance company shall be provided, and for pledged property, a document of ownership or entitlement certification shall be provided. If a guarantee is provided by a third party, a written document of the guarantor agreeing to guarantee and the related credit certification materials shall be provided; State Educational Loans Borrowing Conditions 1.Having full capacity for civil conduct (for a minor, a written letter of consent provided by his or her legal guardian is necessary);

2.Having a valid residence permit; 3.Reaching the study and conduct criteria required by the lender, without any act of bad credit; 4.The school for study has signed a bank-school cooperation agreement with the Bank of China; 5.With recommendation by an reference and also with a witness to provide a written certificate of his or her identity; 6.Agreeing that if the loan is overdue for one year and an extension is not approved, the lender is to make public his or her name, the number of his or her I.D. card and the act of default at the higher learning institute where he or she studies or on related media. Length of Maturity The length of maturity of a state educational loan usually does not generally exceed eight years. If a student granted the loan further studies for a graduate or a second bachelor's degree after the undergraduate course ends, the length of maturity during the period of study is extended accordingly, and the principal and interest of the loan shall be repaid up within four years after graduation from the graduate or the second bachelor's degree. Lending Rate The interest rate for loans of the same grade stipulated by the People's Bank of China applies to the lending rate for state educational loans. Borrowing Limit The amount of a state educational loan shall in principle not exceed RMB6000 per person for one year. Loan Application In applying for a state educational loan, the borrower shall file a written borrowing application to the lender, fill in related application forms and also present the following documents, certificates and materials: 1.Original and duplicate valid personal certificates of residence permit and identity; 2.Enrollment Notification of the school for study and its duplicate, or student's identity card and its duplicate;

3.Certificate of tuition and miscellaneous fees and living expenses of the student during the period of study drawn by the school for study; 4.Letter of recommendation and a certificate agreeing to the borrower's access to 50% interest discount of state educational loan drawn by the school for study.

Auto Loans

Auto loans refer to Renminbi consumer loans granted to individuals or legal persons to finance the purchases of cars. Prospective Borrowers Individuals: with full capacity for civil conduct; with stable occupation and capacity of debt service, and good credit standing; able to provide valid property for mortgage or pledge, or having individual or institutional guarantor with full repayment capacity by subrogation; able to afford the down payment for the car purchase. Legal persons: with legal person status and loan repayment capacity; having proceeds for the down payment for the car purchase that are not less than the prescribed amount placed at the designated bank; having guarantee approved by the lender, etc. Length of Maturity The longest period not exceeding five years. Lending Currency Limited to Renminbi for now. Credit Limit The down payment being 20% of the car price, the amount of borrowing may not exceed 80% of the car price; Lending Rate It is adopted according to the corresponding lending rate announced by the People's Bank of China.

Loan Application Materials required in a car loan application: For an individual: an application for borrowing; valid credentials; certificate of occupation and income, certificate of the debt service ability approved by the creditor; car purchase contract or agreement signed with the designated dealers; documents of certification required for guarantee. For a legal person: an application for borrowing, legal person license, certificate of legal person code, and documents of certification of the legal representative, financial statements for the previous year and recent period, borrowing card or borrowing permit granted by the People's Bank of China, car purchase contract or agreement signed with the designated dealer; and all documents of certification required in the guarantee. Loan Repayment Payment of equal amount of principal or of principal and interest by a monthly installments, the borrower and the lender may choose a repayment pattern by consultation. The borrower shall deposit prior to monthly repayment date provided for in the loan contract sufficient monthly installment in its account so that the bank can directly deduct the repayment of the loan principal and interest. With the consent of the lender, the borrower is permitted to effect an early payment in part or in full.

Housing Loans

Housing loans of the Bank of China refer to loans granted by the bank to borrowers to facilitate housing purchases. Housing loans are divided into housing loans on own account, housing loans on authorization and combined loans. Housing Loans on Own Account Housing loans on own account refer to loans granted to individual housing buyers to facilitate housing purchases that take credit funds of the bank as the source. Prospective Borrowers Natural persons with full capacity for civil conduct.

Length of Maturity Not more than 30 years for a Renminbi loan; not more than eight years for a foreign exchange loan. Lending Rate The lending rate set by the People's Bank of China applies to the interest rate for housing loans on own account. For housing loans in foreign currencies, the corresponding lending rate announced by the Bank of China is adopted. Lending Currency Housing loans on own account are made in Renminbi and foreign currencies. The prospective borrowers of loans in foreign currencies shall be overseas Chinese, Hong Kong and Macao compatriots, employees of foreign-funded enterprises and others who have higher economic incomes, sources of repayment and reliable guarantee. Borrowing Limit The amount of a single loan shall exceed neither 80% of the evaluated value of the house purchased, nor in the meantime the borrowing ceiling as provided by the lender. Mode of Guarantee The lender chooses the mode of guarantee for a housing loan according to the specific conditions, which may include: 1.Pledging the property of the borrower or a third party (including legal person or natural person); 2.Mortgaging the property of the borrower or a third party (including legal person or natural person), including mortgaging the house purchased with this loan; 3.Guarantee by a third party with joint and several liability; 4.Combined guarantee. If the value of the mortgaged property and house or pledged property provided by the borrower is inadequate to cover the amount of the loan, guarantee by a third party with joint and several liability may be added to the shortfall. 5.The borrower buys general credit insurance. Loan Application

The application for a housing loan shall be supported by the following materials: 1.Credentials (referring to I.D. card, residence booklet or other valid residence certificate); 2.Testimonial to prove steady family income of the borrower; 3.Housing purchase contract, letter of intent, agreement or other document of approval that comply with the provisions; 4.A detailed list of mortgaged or pledged property, certificate of ownership (title deed for a house or other titles), and the certificate certifying the consent to mortgage or pledge given by the person entitled to disposal. 5.An evaluation certificate for the mortgaged property issued by a competent department; 6.A written document stating the consent given by the guarantor to the guarantee, and a credit standing certificate about the guarantor; 7.Other materials required by the lender. Housing Loans on Authorization Housing loans on authorization refer to loans to individuals who buy ordinary houses granted by the bank on the authorization of the public reserve fund management department, according to the prescribed requirements, and with the public reserve deposits as the source of funds. Prospective Borrowers Natural persons who have full capacity for civil conduct and also are depositors of housing reserve who deposit housing reserve funds at the funds management center or retired veteran cadres, retired workers and staff members of collective deposit units. Length of Maturity Not more than 30 years. Lending Rate The interest rate for housing reserve loans set by the People's Bank of China applies to the lending rate. Lending Currency

Renminbi. Borrowing Limit The amount of a single loan shall not exceed 80% of the evaluated value of the house to be purchased, and shall also not exceed RMB 390,000 yuan. Mode of Guarantee 1.Mortgage plus general guarantee; 2.Mortgage plus all-risks insurance for housing purchase; 3.Pledge guarantee; 4.Guarantee with joint and several liability. Loan Application The application for a housing loan shall be supported by the following materials: 1.Valid credentials, residence booklet and marriage certificate; 2.Borrowing application that is filled in and sealed by the unit with which the borrower works; 3.Housing purchase contract or letter of intent; 4.If involving the provision of guarantee, a letter of guarantee stating the consent given by the guarantor to the guarantee; 5.Other materials the presentation of which are required by the handling person of the funds management center. Combined Housing Loans A combined housing loan refers to a loan granted by the bank to the same borrower to facilitate the purchase of an ordinary house for self use that takes the public reserve deposit and the credit fund as the sources. It is a combination of a housing loan on authorization and a housing loan on own account from the bank.