BOC鈥檚 RMB cross-border services

By Wang Xinyuan

The Bank of China (BOC) will begin its yuan clearing and settlement service for banks participating in cross-border trade settlement in RMB, according to an announcement by the bank over the weekend.

BOC, the largest foreign exchange bank in the country, announced on its official website Saturday that its subsidiary, BOC Hong Kong (BOCHK), had signed a clearing and settlement agreement on yuan business with the People’s Bank of China (PBC), the country’s central bank.

According to the agreement, BOCHK is the first bank to be approved for both clearing and settlement of cross-border trade transactions in Hong Kong.

BOCHK will launch a series of financial services for its corporate customers to conduct yuan-denominated trade transactions such as remittance, collections and letter of credit services for approved pilot cities, He Guangbei, vice chairman and chief executive of BOCHK, was quoted by Xinhua yesterday as saying.

BOC’s Guangdong branch has signed a clearing and settlement agreement with BOCHK and HSBC, enabling BOC to act as an agent bank for their clearing and settlement services of cross-border trade transactions in renminbi, according to BOC’s announcement.

BOC’s Shanghai branch has signed similar agreements with 11 overseas banks, opening yuan clearing accounts for them, BOC stated.

BOC Shanghai has also established yuan accounts for 17 overseas BOC branches including branches in New York, Paris, Frankfurt and Johannesburg.

PBC and trade related authorities jointly issued the Administrative Rules on Pilot Program of Renminbi Settlement of Cross-border Trade Transactions Thursday.

The new rules provided implementation measures and guidelines to enable yuan settlement of cross-border trade by selected pilot enterprises in the cities of Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan.
 

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