Most people who used the services of banks at least once are aware of the bank’s credit and deposit programs, the possibilities of making various payments, and the like. But in fact, there are much more banking services that these financial institutions provide, for example, operations with securities, various guarantees. We will understand what acceptance is in the bank and what it has in financial transactions, how the bank sets the rate.
Concept of acceptance
First of all, let's start with the concept, having become acquainted with which, it will be possible to move forward. A bank acceptance is a kind of document that is used in some international payment transactions. It allows a company to use not only its business reputation, but also the bank’s rating due to the fact that the bank commits itself to pay a certain amount to the bearer of acceptance.
Accordingly, if the bank is well-known to everyone, it has the trust of people and various organizations, then its services in international operations are very useful to companies that do not have such fame. That is, it is beneficial for companies to enter into transactions with external partners, and the bank is good because it earns on its reputation.
Acceptance at the bank is an opportunity for the buyer to make a deal with partners faster. But in order to be able to use such a security, the buyer himself must meet certain requirements established by the bank.
These can be not only individual requests that the bank develops for its customers based on experience in conducting such operations, but also legislatively established requirements determined by state regulators.
The acceptance of the bank is a kind of credit guarantee - the buyer, as it were, takes a loan from the bank along with the acceptance, undertaking to repay it before a certain date. He can buy anything for a specified amount using acceptance. At the same time, the bank undertakes to pay cash on this security to the bearer.
Preliminary and subsequent acceptance
Acceptance may be preliminary and subsequent.
Upon presentation of a preliminary acceptance, the payer needs to resolve the issue of non-resident accounts within three days and within one day of intra-city accounts.
A subsequent payment claim is paid immediately, but the payer has 3 days left in order to verify the correctness of the money transfer. If necessary, there is the opportunity to refuse acceptance.
How does the bank determine the rate on its acceptance?
When calculating the rate on one or another acceptance, the bank, first of all, determines the cost at which it can sell it on the free market. For example, for acceptances that are doubtful, the banking institution should set a rate that will compensate for possible losses.
That is, the bank must guarantee itself a certain amount of reserve so as not to damage its solvency and liquidity of assets.
Benefits of Financial Services
Due to the fact that it is issued by a serious financial institution, such as a bank, the fulfillment of obligations by the parties participating in such relations is guaranteed. This gives confidence to all contracting parties, which is especially important for lenders.
In addition to the fact that the acceptance of the bank helps to conclude transactions at the international level, such operations are mainly carried out by banks that have international status. Moreover, everyone understands that the bank will simply not give an acceptance to anyone, but will only do so if it is 100% sure that the buyer will fulfill his obligations.
For the buyer, the acceptance of the bank is no less beneficial than the other parties to the relationship. Firstly, thanks to bank guarantees received , the scope of such a security for settlement transactions is quite wide. Secondly, given the time period during which the buyer will have to pay off the debt, he can manage to buy goods, make money on their sale and then pay money on his obligations to the bank. That is, literally, you can manage to make money with this security.
Other application
In addition to the above methods of application, the acceptance of the bank can bring profit in another way. There are times when a banking institution sells its own acceptances, forming them into independent assets. In this case, using a small discount, the bank manages to quickly find a buyer, since the latter will earn on the difference between the purchase amount and the nominal value of the acceptance.
Such a result is beneficial both for the bank, which was able to quickly sell the asset, and for the buyer, who has the opportunity to receive additional profit.