What is the Trade Finance Program's Risk Participation Agreement?
- International, regional, and local banks are eligible to enter into Risk Participation Agreements (RPA) with ADB’s Trade Finance Program (TFP).
- TFP partner banks need to be reputable institutions that have trade finance operations and adequate anti-money-laundering (AML) and know-your-client (KYC) policies.
- As with TFP confirming banks, no joining fees are required and interested parties only need to provide information on their AML and KYC policies, pass the due diligence reviews, and sign the RPA with ADB.
- The agreement enables the accredited RPA bank to automatically bind the TFP to 50% of issuing bank risk in support of trade transactions.
- ADB may enter into a Risk Distribution Agreement (RDA) with insurers, export credit agencies, and other entities developing credit appetite in ADB TFP countries.
- ADB distributes and shares Issuing Bank risk with insurers, export credit agencies, and other entities to leverage capital resources and credit limits.
- ADB conducts credit and integrity due diligence reviews on the applicant; and once found eligible, the party may sign an RDA with ADB’s TFP.
Further reading
How does a bank access the revolving credit facility under ADB's Trade Finance Program?
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