You Are Here: HOME > Commercial Bank > Featured RMB Business > Cross-border RMB Policies > Current Account
Notice of the People's Bank of China on Simplifying the Process of Cross-border RMB Services and Improving Relevant Policies
 

The Shanghai Headquarters, all branches and business management departments, and the central sub-branches in capital cities of provinces (autonomous regions) and sub-provincial cities of the People's Bank of China; China Development Bank; all policy banks; state-owned commercial banks and joint-stock commercial banks; and Postal Savings Bank of China:

In order to further improve efficiency in cross-border RMB settlement and facilitate the use of RMB in cross-border settlement by banking financial institutions (hereinafter referred to as “banks”) and enterprises, you are hereby notified of the following issues concerning simplifying the process of cross-border RMB services and improving relevant policies, among others:

I. Cross-border RMB Settlement Service under the Current Account

1. On the basis of the three principles of “know your customers,” “know your business,” and “customer due diligence,” a domestic bank may directly conduct cross-border settlement based on the business certificates or Description of Receipts/Payments in Cross-border RMB Settlement submitted by an enterprise (except one on the list of enterprises under key supervision for RMB settlement in export trade in goods).

2. If RMB settlement funds under an enterprise's current account need to be automatically credited, a domestic bank may credit the account first and then verify the authenticity of relevant trade.

3. Domestic banks shall be encouraged to launch the cross-border RMB trade financing service. Domestic banks may launch the cross-border asset transfer service for cross-border RMB trade financing.

4. Whenever enterprises on the list of enterprises under key supervision for RMB settlement in export trade in goods handle cross-border RMB settlement under the current account, domestic banks shall closely verify the authenticity of their business in accordance with the principles set out in the Letter of the General Office of the People's Bank of China, the General Office of the Ministry of Finance, the General Office of the Ministry of Commerce, the General Office of the General Administration of Customs, the General Office of the State Administration of Taxation and the General Office of the China Banking Regulatory Commission on the List of Enterprises under Key Supervision for RMB Settlement in Export Trade in Goods (No. 381 [2012] of the General Office of the People's Bank of China). Each branch office of the People's Bank of China may send a list of locally registered enterprises under key supervision for RMB settlement in export trade in goods to banks within its jurisdiction for internal use.

II. Cross-border Clearing Services for RMB Accounts of Bank Cards

1. Cross-border inter-bank clearing services for transactions within the RMB accounts of bank cards shall be provided by bank card clearing institutions established in China which are qualified for RMB services (hereinafter referred to as “domestic bank card clearing institutions”) through overseas RMB business clearing banks or domestic agent banks.

2. When consumers use RMB accounts of bank cards issued by domestic banks for spending or cash withdrawal overseas, domestic issuing banks shall clear the transactions with domestic bank card clearing institutions in RMB, and domestic bank card clearing institutions shall clear the transactions with overseas acquiring institutions in RMB or foreign currency.

3. When consumers use RMB accounts of bank cards issued by overseas banks for spending or cash withdrawal in RMB in China, domestic acquiring institutions shall clear the transactions with domestic bank card clearing institutions in RMB, and domestic bank card clearing institutions shall clear the transactions with overseas issuing banks in RMB.

4. Information on cross-border receipts and payments in RMB involved in cross-border inter-bank clearing services for RMB accounts of bank cards shall be uniformly submitted to the information management system for cross-border receipts and payments in RMB by domestic bank card clearing institutions through their domestic settlement banks.

5. Cross-border RMB clearing services for bank cards shall be handled in accordance with the above provisions. The relevant provisions on the clearing of individual RMB bank cards in Article 6 of Announcement No. 16 [2003] of the People's Bank of China, Article 6 of Announcement No. 8 [2004] of the People's Bank of China and Articles 3, 4 and 17 of the Notice of the People's Bank of China on Issues concerning Handling Individual RMB Services between Banks in the Mainland and Banks in Hong Kong and Macau (No. 254 [2004] of the People's Bank of China) shall no longer be implemented.

III. Overseas RMB Loan Business of Domestic Non-Financial Institutions

1. Domestic non-financial institutions may apply to domestic banks for the settlement of overseas RMB loans. Domestic non-financial institutions may apply to domestic banks for settlement of overseas RMB capital pool loans in the RMB capital pool mode, if they have equity relationships or are controlled by the same parent company, and one member institution exercises the functions of regional headquarters or investment management.

2. Domestic banks shall provide cross-border RMB settlement services to domestic non-financial institutions only after careful verification of the application materials for overseas RMB loan services submitted by domestic non-financial institutions.

3. Domestic non-financial institutions which carry out overseas RMB loan business shall apply to domestic banks to open special RMB deposit accounts dedicated to the provision of RMB loans overseas, in accordance with the Measures for the Administration of RMB Bank Settlement Accounts (Order No. 5 [2003] of the People's Bank of China) and other provisions on the administration of bank settlement accounts.

4. The interest rate, term and use of a loan provided by a domestic non-financial institution to a foreign party shall be determined by the borrower and the lender through consultation within a reasonable range in accordance with commercial principles.

5. An overseas RMB loan must be recovered in RMB into the special RMB deposit account used for the provision of the loan, and the amount recovered shall not exceed the total of the amount of the loan, interest, domestic income tax, relevant expenses, and other reasonable income.

6. Banks shall diligently perform their duties of information submission, and submit information on cross-border receipts and payments in RMB, information on cross-border credit financing services and other relevant information to the information management system for cross-border receipts and payments in RMB in a timely and accurate manner. If any cross-border RMB guarantee service is involved, information on cross-border RMB guarantee shall also be submitted.

V. Domestic non-financial institutions may provide RMB guarantees for foreign parties in accordance with the Property Law of the People's Republic of China, the Guarantee Law of the People's Republic of China and other laws. When domestic non-financial institutions provide guarantees to foreign parties and use RMB for performance, domestic banks shall handle RMB settlement for them after verification of authenticity, and submit relevant information to the information management system for cross-border receipts and payments in RMB. Payments for performance may also be made by domestic non-financial institutions directly with RMB funds retained overseas.

VI. The term of financing a RMB account of an overseas participating bank by a domestic agent bank shall be extended to one year. The amount of financing in the account shall not exceed 3% of the balance of all RMB deposits of such domestic bank at the end of the previous year.

VII. Fund remittance and transfer are allowed for settlement purposes between the RMB inter-bank current accounts that overseas participating banks have opened in domestic agent banks and the RMB accounts that overseas participating banks have opened in overseas RMB business clearing banks. Fund remittance and transfer are allowed for settlement purposes between the domestic RMB clearing accounts of overseas RMB business clearing banks.

VIII. All branch offices of the People's Bank of China shall fully utilize the information management system for cross-border receipts and payments in RMB, effectively monitor and analyze information, regularly conduct off-site supervisory inspections on the cross-border RMB business of banks and enterprises in accordance with law, and conduct on-site inspections as actually needed to prevent risks. If a bank is found to have violated relevant provisions, the bank shall be required to make rectification during a prescribed period.

IX. This Notice shall come into force upon the date of issuance. For any discrepancies between this Notice and other relevant provisions, this Notice shall prevail. Branch offices of the People's Bank of China at or above the level of a central sub-branch in a sub-provincial city shall forward this Notice to the branch offices of the People's Bank of China, foreign-funded banks, and local incorporated financial institutions within their respective jurisdictions.

Any problems encountered in implementation shall be reported to the Monetary Policy Department II of the People's Bank of China in a timely manner.

People's Bank of China

July 5, 2013