Discounting bills means that the demander requires the bank or discount company to convert the unexpired commercial bills, bank acceptance bills or short-term bonds into cash, and the bank or discount company (financing company) receives these unexpired bills or short-term bonds, deducts the interest after discount according to the par value, pays cash, and then collects money from the drawer when the bills expire. Therefore, for ticket holders, discounting is an act of selling bills that have not expired at the end of the period to banks to obtain liquidity, so as to recover the capital prepaid to commercial credit in advance. For banks or discount companies, discount is a loan business combined with commercial credit.
The transaction types in the discount market can be roughly divided into two categories. First, bill holders ask commercial banks or discount companies to discount for cash, which accounts for most of the discount market business; The other is that the central bank will discount the bills discounted by commercial banks or discount companies again to finance banks and discount companies. Rediscount is an important means for the central bank to control financial and credit laws and regulations. The types of bill discount can also be divided into bank bill discount, commercial bill discount, bond and treasury bill discount according to the different bills.
Discounting bills and issuing loans are both asset businesses of banks, and they are both financing customers, but there are many differences between them.
(1) The liquidity is different. Due to the liquidity of the bill, the holder can discount it in a bank or discount company in exchange for funds. Generally speaking, the discount bank can only ask the payer for payment when the bill expires, but if the bank is in urgent need of funds, it can rediscount it to the central bank. However, the loan has a time limit and cannot be recovered before it expires.
(2) The interest-bearing time is different. In the discount business, the interest is deducted from the bill denomination when the business occurs, and the interest is deducted in advance. The loan will bear interest afterwards, and it can be recovered together with the principal at maturity, or it will bear interest regularly according to the contract.
(3) With different interest rates, the discount rate of bills is lower than that of loans, because the purpose of bill discount is to obtain liquidity financing, not without funds. If the discount rate is too high, the burden of obtaining financing for the holder is too heavy and the cost is too high, and the discount business cannot occur.
(4) The use scope of funds is different. After the bill is discounted, the holder has the complete right to use the funds, and can use the funds according to his own needs without any restrictions from the discount bank and company. However, the borrower should be examined, supervised and controlled by the lending bank when using the loan, because the use of loan funds is directly related to whether the bank can recover the loan well.
(5) The parties involved in debt and creditor's rights are different. The debtor of discount is not the applicant of discount, but the drawer, that is, the payer, who can only recover the ticket money from the discounter or endorser when he is refused payment. The debtor of the loan is the person who applies for the loan, and the bank has a direct debt relationship with the borrower. Sometimes the bank will ask the borrower to find a guarantor to guarantee repayment, but it is much simpler than the related party of the discount business.
(6) The scale and duration of the fund are different. Generally, the amount of bill discount is not too large, and the capital scale of each discount business is limited, so partial discount can be allowed. The term of the bill is short, generally 2-4 months. However, the loan forms are diverse, the term is different and the scale is large. When the loan expires, the borrower may continue to borrow with the consent of the bank.
Discounting bills allows some idle fund owners to use each other and gain benefits. Therefore, it is at the center of money market activities. Compared with other markets, the discounted bill market has many special advantages. For banks, discount banks can get the following benefits: more interest income; Fast recovery of funds; It is safer to recover funds. For discount enterprises, short-term financing can be obtained through discount.
When a bank discounts bills, the calculation formula of the discounted payment amount is as follows:
Bank discount payment amount = bill denomination ×( 1 one-year discount rate × discounted 1365 days)