The so-called off-balance sheet activity (OB) refers to the business that commercial banks engage in, which is not included in the balance sheet according to the current accounting standards and does not form real assets and liabilities, but can increase the bank's income. Off-balance sheet business is a high-risk business activity, which forms the contingent assets and liabilities of banks, some of which may be converted into the actual assets and liabilities of banks, so it is usually required to be disclosed in the notes to accounting statements.

Off-balance-sheet business in a broad sense includes not only off-balance-sheet business in a narrow sense, but also risk-free business activities such as settlement, agency and consultation, so off-balance-sheet business in a broad sense refers to all businesses engaged by commercial banks that are not reflected in the balance sheet.

Usually, what we call off-balance sheet business mainly refers to off-balance sheet business in a narrow sense.

There are the following categories:

1. Guarantee business refers to the business that commercial banks are entrusted by customers to take responsibility for off-balance-sheet business of third parties, including letter of guarantee, standby letter of credit, documentary letter of credit, acceptance, etc.

2. Commitment business refers to the agreed credit business provided by commercial banks to customers on a certain date in the future according to the agreed conditions, including loan commitment.

3. Financial derivative transactions refer to derivative transactions such as forwards, swaps and options of currencies (including foreign exchange) and interest rates conducted by commercial banks to meet the needs of customers' hedging or their own position management.

If you want more details, email me and I'll send you a document.