OMIC > CMA (Collateral Management Agreement)
On September 1st, 2008, OMIC commenced Collateral Management Services (CMS) in the Asian region in order to provide our clients (Banks, Cargo Owners) with an opportunity to expand their business, provision of a finance service by the Bank and receipt of a loan by the Cargo Owner, guaranteed by the product kept as collateral in the warehouse.
OMIC assures our clients of a professional service to make secure the commodities and the products with a guarantee by Professional Indemnity Insurance covered by an International Insurance Company as a safety net to the clients.
Collateral management services is a service to secure and monitor the product offered as collateral and kept in storage under a loan agreement between the Cargo Owner and the financier (Bank) by a third party inspection agency like OMIC (called as Collateral Manager) nominated by the financier. The agreement amongst the parties (Bank, Cargo Owner and Collateral Manager) is known as "Collateral Management Agreement (CMA)".
OMIC can provide Collateral Management Services for various commodities including agricultural and industrial products in the following Asian countries.
●Vietnam ●Thailand
●Malaysia ●Singapore
●Indonesia ●India
●Bangladesh ●Sri Lanka
●Myanmar ●Hong Kong
●Taiwan ●Korea
(1) Request Bank for a loan based on their product to be kept in a certain warehouse.
(2) Set up a loan agreement with the condition of Collateral Management Agreement among the 3 parties (Bank, Cargo Owner, OMIC).
(3) Request OMIC to secure/ensure quantity and quality (if requested) of the product in the warehouse under Collateral Management Agreement.
(4) Provide OMIC with a suitable environment to perform its duty in coordination with the parties concerned such as warehouse owner, supplier and the transportation company, etc.
(5) OMIC to maintain its own staff to ensure/keep track of quality and quantity of the product in the warehouse.
(6) Issue Warehouse Receipt to the order of the Bank for the account of the Cargo Owner.
(7) Provide a loan to the cargo owner based on the product in the warehouse.
(8) Ensure that the cargo is under the custody of OMIC and report updated quality and quantity of the cargo remained in the warehouse.
(9) Arrange to deliver, stow and load the product entering and leaving the warehouse under control of OMIC.
(10) Cargo Owner will be responsible for settlement of OMIC's fee.
Advantages of a CMA
Advantage for the Bank
- Grant a loan based on the actual value of products which is secured by OMIC
- OMIC specializes in management of the quality and quantity as well as handling of the product so that the product kept, in entering and leaving the warehouse, will be properly controlled.
- A loan can be paid off using the value of the product only when it is sold under the control of OMIC.
- Guarantee of the product under control of OMIC is insured by OMIC's Professional Indemnity Insurance.
Advantage for the owner of the product
- The quality and quantity of the product is recorded and controlled by OMIC at the time of receipt into the warehouse.
- Purchase of the product at a time of maximum supply and low price.
- Receive a loan from the bank easily with the condition of OMIC involvement in controlling the product which is to be used as collateral.
- Sell the product at a time when it has a higher market price.
