BIDV and ADB commit to work together to promote trade flows

(Chinhphu.vn) - The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and the Asian Development Bank (ADB) have just signed a Confirming Bank Agreement under the ADB's Trade and Supply Chain Finance Program (TSCFP), marking an important step forward in the extensive cooperation between the two organizations, opening up many new opportunities in the field of trade finance.

Boosting Trade Finance: BIDV and ADB sign new agreement

The signing of the Financing Bank Agreement with ADB helps to expand cooperation opportunities between the two banks in implementing trade finance transactions. Accordingly, BIDV can carry out eligible trade finance transactions as stipulated in the Agreement (including guarantee transactions, letter of credit confirmation, letter of credit reimbursement financing, import letter of credit refinancing loans, etc.) for other commercial banks on the basis of ADB's guarantee.

Guaranteed banks are the Issuing Banks in the TSCFP Program, which can be guaranteed by ADB for their payment obligations to BIDV on the transaction maturity date, with a maximum guarantee value of up to 100% of the trade finance transaction value.

ADB's guarantee mechanism helps limit risks and enhance BIDV's financing capacity for ADB's member banking partners in trade transactions with new, potential markets such as Bangladesh, Sri Lanka, Mongolia... and in the future, domestic trade finance transactions in the Vietnamese market.

This mechanism also creates conditions for BIDV to build a more competitive pricing policy when implementing trade finance services with partner banks, thereby indirectly supporting corporate customers to access funding sources at reasonable costs in import-export transactions. Cooperation contributes to diversifying the products and services that BIDV provides to partner banks and corporate customers in the import-export sector, affirming its role as one of the leading important partners and having the most extensive cooperation with ADB in Vietnam.

Previously, in 2009, BIDV signed an Issuing Bank Agreement with ADB under the TSCFP Program and has made many positive contributions to the development of the Program over the past 15 years. With the new role of Confirming Bank under the recently signed agreement, BIDV will continue to exploit the potential for cooperation, while affirming its commitment to accompany ADB in promoting global trade flows in general and the Asia- Pacific region in particular.

Currently, ADB's TSCFP has 279 member banks globally, including 79 recipient banks in 16 ADB member countries and 200 sponsor banks in 90 countries worldwide .

The TSCFP aims to maximize the development impact of trade and supply chains in developing countries in Asia, by providing guarantees and loans to eligible banks. The program also focuses on building more sustainable, resilient and transparent supply chains in global trade finance.

BIDV has participated in the TSCFP Program since 2009 and has signed a Recipient Bank Agreement with ADB. Over the past 15 years of participation, BIDV has been awarded the Leading Partner Bank in Vietnam Award four times by ADB TSCFP (2016, 2017, 2018, 2023); Best SME Trade Finance Transaction Award (2018); Leading Partner Bank of the Decade Award; and Best Green Trade Finance Transaction Award (2024).

Mai Chi

Source: https://baochinhphu.vn/bidv-va-adb-cam-ket-dong-hanh-thuc-day-dong-chay-thuong-mai-102250916145512368.htm