Bahrain bank offers Sharia-compliant trade finance

Bahrain's BMI Bank has launched a Sharia-compliant financing scheme that includes letters of credit and bank guarantees. The scheme was developed in association with Tamkeen, an independent government funded agency that provides various kinds of support, including subsidies, aimed at developing Bahraini individuals and enterprises. The scheme is targeted at private sector enterprises in Bahrain. It aims to offer enterprises quick and convenient access to finance to implement their expansion plans. Subsidized finance packages are available at tenors of up to ten years. As part of the agreement, Tamkeen will guarantee 50 per cent of the total financing amount and subsidize payments due from participants in the scheme. The scheme also offers trade finance products, including L/Cs and bank guarantees as well as Islamic instruments such as Murabaha financing for working capital, vehicle and equipment financing.

Taiwan targets Chinese guarantee market

Taiwanese banks are set to target mainland China's small- and medium-sized enterprises (SMEs) by offering yuan-denominated bank guarantees at competitive rates. According to local media, the guarantees will be less expensive than alternatives on offer, including commonly used letters of credit. A report in the Economic Daily News says that four of Taiwan's state-funded banks applied for permission to provide Chinese SMEs with bank guarantees under the economic cooperation framework agreement signed by Taiwan and China earlier this year. The banks set to provide the service are First Bank, Taiwan Cooperative Bank, Land Bank and Chang Hwa Bank. The banks will charge guarantee fees in yuan rather than US dollars. According to the newspaper report, this would provide better margins for the banks as well as providing Chinese SMEs with competitively priced finance facilities. The report says the bank guarantees would be more competitive than corporate loans or US dollar-dominated L/Cs.

L/Cs may be used for Canadian pension plans

Letters of credit may play a key role in Canada's federally regulated private pension plans if government proposals are approved. The measure would help pension plan sponsors meet funding needs and has been proposed ahead of talks on pension reforms between Canada's federal and provincial governments. If the proposal goes through, private pension plan sponsors would be able to secure L/Cs in lieu of making solvency payments to pension funds up to a limit of 15 per cent of a plan's assets. This is one of several measures proposed to make Canada's private pension plans less vulnerable to volatile financial markets.

Abu Dhabi bank offers L/Cs, guarantees online

Abu Dhabi Commercial Bank (ADCB) has launched an online trade finance platform, ProTrade, so that its customers can manage trade finance transactions from anywhere at any time. Letters of credit and bank guarantees are amongst the instruments that can be managed on the new platform. ProTrade becomes part of the UAE's third largest bank's EasyTrade suite, which aims to optimize the range of trade finance products and services available for both importers and exporters involved in international trade. The new system claims to bring quicker turnaround times and increase productivity by providing customers the opportunity to initiate transactions and receive notifications from ADCB at any time, regardless of banking hours.

Banking Commission heads to Zurich

The spring meeting of the ICC Banking Commission will be held from 21-23 March in Zurich. Delegates will have a full plate of items to discuss. The Commission's officers have decided to develop a long-term plan for Commission activities and will lead a discussion of the Commission's business plan for the years 2011-2015. There is no shortage of projects in the pipeline, including, among others, a revision of ISBP 681, new rules on forfaiting, the default register on trade finance, the Global Survey on trade and approaches to terrorist financing.