Recently, Standard Chartered Bank's Shanghai branch provided Standard Chartered Hong Kong with one million yuan of cross-border Renminbi account financing funds. This is the first cross-border Renminbi account financing service to take place in China since the launch of the cross-border trade Renminbi settlement pilot program.
This service is of great significance to increasing the amounts of Renminbi held by overseas banks participating in cross-border trade Renminbi settlement and improving Renminbi’s service capacity when these banks provide trade settlement services for enterprises.
The interest rate for the Renminbi account financing service stood at 1.55 percent, with a financing term of 27 days. Administrative measures for the cross-border trade Renminbi settlement pilot program (the Measures) and the rules for implementing the Measures stipulate that correspondent banks in China can provide Renminbi account financing services for overseas banks, which have opened inter-bank transaction accounts with them and participate in cross-border trade Renminbi settlement, so as to meet the interim demand of account capital. Of the banks participating in Renminbi settlement of cross-border trade, the Chinese domestic banks' total account balance of financing with its overseas counterpart shall not exceed one percent of the total Renminbi deposit balance at the end of the previous year, and the financing term shall not surpass one month.
According to the Shanghai headquarters of the People's Bank of China, the financing term is stipulated not to surpass one month to mainly guarantee the fluidity of account financing funds, so as to provide trade settlement services for enterprises. Any overseas bank, which participates in cross-border trade Renminbi settlement and satisfies the requirements of the Measures, can launch this service. Moreover, interest rates and mortgages for cross-border Renminbi account financing services are determined following negotiations between banks. The account financing service between Standard Chartered Bank's Shanghai branch and Standard Chartered Hong Kong was transacted at an interest rate of only 1.55 percent, so the financing cost was relatively low.
By People's Daily Online
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