What is electronic savings bond?
A: Electronic savings bond is a type of non-circulating RMB bond issued by MOF toward Chinese citizens with a large amount of savings funds. Its obligatory rights are recorded electronically.
Electronic savings bond has the following seven features:
The bond can only be subscribed by Chinese individual consumers; non-circulating; the obligatory rights will be recorded electronically; safe and stable returns; encouraging holding to maturity; simplified procedures; multiple interest-paying methods.
Where can you subscribe the bond?
Seven Commercial Banks: Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, China Merchants Bank and Bank of Beijing
If you want to know more about the policy and issuance information, please use the following channels.
1. You may go to the nearby outlets of the seven banks mentioned above or dial their hotline for details.
2. You may dial the policy inquiry hotline (010-68081427, 010-68081167) of National Debt Association of China (NDAC) for details.
3. You may log on the website of MOF to read the issuance bulletin. The website of MOF is http://www.mof.gov.cn.
Work Flow of Electronic Savings Bonds:
1. Open Personal T-bond Account
Take your valid identification and your bankbook (the debit card) opened in one of 7 administering banks → read the custody services rules and fill in the application form over the counters of that bank→ the bank review and approve your application → receive the account-opening certificate for personal T-bond account.
Note:
1) As the bankbook or the debit card used for opening the account will be used as the capitals settlement account of personal T-bond account in the long run, investors are suggested to choose a bank they often visit as the custody bank for their obligatory rights.
2) The variety and quality of services offered by these 7 administering banks may vary a lot, such as the physical appearance of personal T-bond account, whether to have the obligatory rights account bankbook, the speed of information disclosure and the method for obligatory rights inquiry. Before you open your account, you need to read the custody services rules carefully and make sure what type of services are available from the bank outlets.
3) The obligatory rights of electronic savings bonds purchased through the personal T-bond account at each administering bank are homogenous. Moreover, the new quota allocation method is adopted; therefore the sales pace will be approximately the same across all administering banks.
2. Issuance and Subscription
Make sure you have enough capitals in you capital settlement account → take your valid identification, personal T-bond account and your bankbook or debit card used for opening the account → go to the outlet to fill in the application for subscription or sign your name on the bank document after verbal application → the bank confirms the obligatory rights after confirming it has enough quotas and you have enough capitals → obtain the receipts confirming your subscription.
Note:
1) The identification certificates required for subscription vary slightly in different banks. Please confirm what certificates do different outlets require.
2) There is no unified cap for the subscription for T-bonds.
3) The receipt for subscription confirmation is not a certificate for the obligatory rights. The loss of the receipt will not affect the ownership of obligatory rights. But the receipt contains much useful information and investor’s private information; you are suggested to keep it properly.
4) If the bank does not have quotas, you need to ask the staffs of the outlet, “do you mean that you not have quotas today? ” or “ Have the sales have already ended?” If the outlet does not have quotas today, you may go to the outlet the next day. The latter one means this issue of T-bond has been completely sold out.
3. Obligatory Rights Inquiry
Three inquiry channels:
1) You may go to the outlet to print out the statement receipt of personal T-bond account.
2) You may call our client services hotline for inquiry.
3) If you have questions about the results through the above two inquiry channels, you may call the recheck and inquiry hotline of China Government Securities Depository Trust & Clearing CO. LTD. (You can only access the bonds balances up to the previous day through the recheck and inquiry hotline)
4. Encash before Maturity
Make sure that your bonds to be cashed before maturity are within the required time limit → \ take your valid identification, personal T-bond account and your bankbook or debit card for opening the account → go to the outlet to fill in the application for subscription or sign your name on the bank document after your verbal application → the bank transfers the capitals to your capitals settlement account after verification→ receive your receipt confirming encash before maturity.
Note:
1) The identification required for encash before maturity vary slightly in different banks. Please confirm what certificates do different outlets require.
2) If you want to cash the bonds before maturity, a corresponding amount of proceeds will be deducted and a reasonable amount of processing fees will be charged. If it is not for emergent purposes, you are recommended not to cash the bonds before maturity.
3) The interests calculating process for encash before maturity is listed on the receipt.
5. Interests Payment Principals Repayment
The bank transfers the principals and interests directly to your capital settlement account upon without the need of going through other procedures.
Supervision and Reporting against Incompliant Practices
All local departments of finance and branches of the People’s Bank of China (PBC) take charge of supervising and managing the issuance of electronic savings bonds in areas within their respective jurisdiction. You may call the provincial-level financial departments (bureaus) or local branches of PBC or visit the websites of Ministry of Finance (MOF) and PBC to find the supervision telephone number.
