Shougang Finance Company applied to the People’s Bank of China on July 21 to join the national interbank lending market. On July 28, Shougang Finance Company was allowed to enter the market and carry out networking work. Recently, the company successfully handled the first 100-million-yuan interbank lending business with Beih Finance Company, and achieved another financial innovation result.

Interbank lending is unsecured financing behavior carried out with the approval of the People’s Bank of China through the national unified interbank lending system for the purpose of balancing surpluses and shortages of funds between financial institutions. The role of interbank lending is mainly reflected in the following four aspects. First, it opens up a new financing channel, through which funds can be obtained from the interbank borrowing market, the abilities of capital supply and of liquidity management are enhanced, and the rational allocation of capital positions can be facilitated. Second, it offers a new way to use capital, through which idle funds can be lent to other financial institutions to further improve the income of idle funds. Third, it improves the ability of controlling interest rates. Through the interbank lending market, we can track the trends of the financial market in real time, adjust the pricing strategy of interest rate in time, and enhance our initiative in interest rate pricing—an ability which has turned out to be extremely crucial in the context where the reform in interest rate marketization is deepened increasingly. Fourth, the financial attribute is further strengthened. After joining the interbank market, the banking identity of the finance company can be confirmed, which is helpful to establish interbank cooperation with more financial institutions.

The success in handling interbank lending of Shougang Finance Company, on the one hand, is beneficial to widening the Group’s short-term financing channels and capital operation channels, and enriching the Group’s liquidity management, which better ensures the Group’s fund settlement, adjusts the seasonal fluctuations of funds, and improves the efficiency of the use of funds. On the other hand, through actively exploring active debt cooperation, it strengthens cooperation with financial institutions, thus further enhancing its corporate image in financial markets.

Shougang Finance Company will, on the basis of fully summing up the experience regarding the previous business development, establish mutual credit with a greater number of high-quality financial institutions, strengthen the cooperation with its counterparts, take the platform as an important supplementary means of liquidity management, and play a positive role in order to strengthen Shougang Group’s centralized management of funds and improve capital gains.