Oct. 28, 2009, 9:02AM - ICBC Bill Department successfully rediscounted an electronic commercial draft of Shanghai Bank via the Nationwide Electronic Commercial Draft System. This is the first such transaction in the country. The unrivalled transaction speed of less than 30 seconds fully demonstrates what is meant by "electronic" bill.
As one main payment instrument used in domestic bulk commodity trade, the commercial draft has many features of large amount, long tenor, easy financing and guaranteed by banks and large enterprises. It is widely adopted in the country now. However, commercial drafts used in daily transactions are usually in paper which are unsafe to carry around, difficult to endorse because of the strict rules and inconvenient to cash through.
All these hurdles invariably cause obstacles to the smooth progress of using commercial drafts. While in the case of electronic commercial draft, the bill is drawn in the form of data message by the drawer and the payer is ordered to pay unconditionally the stated amount to the payee or bearer on the specified date.
When compared to the paper commercial draft, the electronic draft bears distinct advantages of being issued and circulated in the form of data message and using electronic signature instead of the written or stamped signature. Electronic draft plays a significant role in stopping forgery/counterfeit bills, putting down the settlement cost of a company, improving settlement efficiency, and in the control of financial risk.
According to the ICBC spokesperson, being one of the thirteen financial institutions included in the first group for the opening of People's Bank Electronic Commercial Draft System, ICBC will continue to maintain a policy of innovation in this new business area of electronic bill. The bank will make her contribution to boost electronic bills as a popular payment method in the fields of national economy, trade finance, payment and settlement, and electronic commerce.
