China Banking Regulatory Commission, Tentative Measures for the Administration of the Factoring Business of Commercial Banks

For the purposes of these Measures, the phrase “transfer of accounts receivables” means the assignment of all rights and interests relating to accounts receivables (Article 9).

Main contents: A commercial bank may not engage in factoring business on the basis of an unlawful underlying transaction contract, consignment contract, future accounts receivable, accounts receivable the title to which is unclear, a right to request payment arising in connection with a note or other negotiable security, etc (Article 13).

When accepting factoring business, a commercial bank shall stringently review the credit rating, and business and financial positions of the seller and/or the buyer, analyse the details of the accounts receivables that are to be factored, including whether they have been pledged or transferred and their age structure, rationally evaluate the buyer's intent to pay and payment capacity, and the seller's repurchase capacity, and review the genuineness and lawfulness of the sale and purchase contract and other such materials (Article 14).

The engagement in factoring business by policy banks, branches of foreign banks, rural cooperative banks, rural credit associations, finance companies and other such banking financial institutions shall be handled with reference to these Measures (Article 35).