Rediscounting denotes the procedure whereby a financial institution in possession of a bill endorses and transfers the rights associated with said bill to another financial institution prior to the bill's maturity date. The buyer then deducts a predetermined interest amount and remits the agreed sum to the bill holder. Outright rediscounting constitutes a transaction wherein the seller transfers an unexpired, discounted bill to the buyer. Rediscounting can be categorized into two types based on the transaction method: repurchase rediscounting and outright rediscounting.

　　 Repurchase Rediscounting: Divided into pledge repurchase and outright repurchase.

　　A pledge repurchase agreement (repo) denotes a financing transaction wherein the repo party provides a bill as collateral to the reverse repo party in order to secure funds. Both participating entities stipulate that on a specified future date, the repo party will return the funds to the reverse repo party in a predetermined amount, and conversely, the reverse repo party will return the originally pledged bill to the repo party.

　　An outright repurchase agreement pertains to a transaction in which the repo party sells a bill to the reverse repo party under the stipulation that, on a specified future date, the repo party will repurchase the bill from the reverse repo party at a mutually agreed-upon price.

　　 Outright Rediscounting: denotes a transaction wherein the seller transfers an unexpired, previously discounted bill to the buyer.