In the future, with the widespread application of domestic letters of credit, more new financing models will emerge in the market to promote the rapid development of trade finance.

As an important settlement method in the field of domestic trade, domestic letter of credit, bank acceptance bill, and domestic factoring are equally important, which can not only solve the trust problem between buyers and sellers, but also meet the settlement financing needs of enterprises, and play a positive role in promoting the development of domestic trade.

On April 27, 2016, the People's Bank of China and the China Banking Regulatory Commission announced the implementation of the new version of the Measures for the Settlement of Domestic L/C, providing scientific guidance for the development of domestic L/C business.

With the continuous change of the domestic L/C market demand, the innovation of banking products has continued to increase, and the domestic L/C business has broken through the restrictions of the issuance business and derived many new financing products.

From the perspective of the buyer's market, the financing products in the field of domestic letters of credit generally include the following. There are two main types of financing products that can be provided by domestic L/C to buyers, one is domestic L/C buyer financing, and the other is buyer payment.

Among them, buyer's financing refers to the trade financing provided by the bank to the buyer, and the repayment time of the financing payment and related interest is agreed in combination with the buyer's sales collection cycle, with the purpose of helping the buyer fulfill its payment obligations.

If the buyer has a temporary shortage of funds and is unable to pay the trade payment on time, but the seller requires the buyer to pay on time, in this case, buyer financing can be a good way to help the buyer solve the problem of capital shortage.

In addition to providing financing directly to the buyer, the bank can also handle financing for the buyer through interbank payment, so that the enterprise can reduce the financing cost.

For a long time, because the payment business is accounted for off-balance sheet on the bank's balance sheet and will not occupy too much of the bank's on-balance sheet credit assets, the business has developed very quickly and reached its peak in 2010~2011.

In 2012, the China Banking Regulatory Commission (CBRC) issued the Notice on Regulating the Administration of Interbank Payment Business (Circular No. 237), which requires:

"The entrusted bank included the payment business in the balance sheet accounting", which led to a significant reduction in the scale of the payment business in a very short period of time.

In June 2013, the China Banking Regulatory Commission (CBRC) required the repayment and refactoring of domestic letters of credit

"New payment business" is transferred to on-balance sheet accounting; In 2014, the China Banking Regulatory Commission (CBRC) issued the Notice on Regulating the Interbank Business of Financial Institutions, which clearly stated

"In principle, interbank payment is only applicable to banking financial institutions for cross-border trade settlement",

"The entrusting party shall not entrust other local financial institutions to pay on behalf of the client when it has branches in the same city or county, and shall not provide disguised financing through interbank payment", which further restricts the domestic L/C payment business, resulting in a further reduction in the scale of the business.

At present, all domestic banks handle buyer financing business for customers through their own funds.