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ICBC Approved as RMB Clearing Bank in Singapore

The Industrial and Commercial Bank of China has been chosen as the RMB clearing bank in Singapore, according to an announcement by the People's Bank of China on Feb 8. This is the first time that China's central bank picks out a RMB clearing bank outside China, marking a further step that could help the use of RMB in cross-border trades.

According to an ICBC executive, ICBC Singapore Branch once mandated as the RMB clearing bank in Singapore will perform dutifully its responsibilities and obligations in line with the regulatory rules of China and Singapore, as instructed by the monetary authorities of the two countries. The goal is to provide reliable, top-class and fast RMB clearing services for participating banks in Singapore and make new contribution to the trade and investment cooperation and the personnel exchange between China and Singapore.

Established in 1993, ICBC Singapore Branch is the first overseas branch of ICBC. Over the course of two decades, the branch has kept the momentum in different business segments of international settlement, trade finance, global cash management, cross-border RMB service, bank card and electronic banking. ICBC Singapore Branch is one of the mainstream commercial banks in Singapore holding a full-bank license issued by Monetary Authority of Singapore. In recent years, Singapore Branch has seized the strategic opportunity to loom large in cross-border RMB business through the launch of a range of new products covering RMB settlement, RMB trade finance, RMB payroll service and dual-currency credit cards. In March, 2011, the Branch set up the first RMB Business Center in Singapore, a move that established ICBC Singapore's leadership in the local RMB business market. At the end of 2012, ICBC Singapore Branch's balance of RMB assets stood at RMB 15.3 billion. The cross-border RMB settlements surged 107% from a year earlier to more than RMB 94 billion.

Since the launch of pilot program on RMB cross-border settlement in 2009, ICBC has taken all necessary steps to broaden the use of RMB across borders, said an executive with the Bank. Growth is impressive marked by the strong momentum. 2012 data showed that the RMB cross-border settlements by ICBC branches at home and abroad reached over RMB 1.5 trillion, a jump of nearly 70% from the previous year, ICBC's global RMB clearing network spans nearly 70 countries/territories. Today, cross-border RMB service is available in all ICBC overseas branches which have got the permission of local regulatory authorities. In some ICBC overseas branches, RMB business contributed one-third or even 50% to their assets, deposits or business revenues, becoming a key element of their core competence. ICBC is now operating in 39 countries/territories. As the largest shareholder of the Standard Bank of South Africa (a major bank in Africa) that has presence in the financial markets of 18 African countries, ICBC has set up a large global network covering nearly 60 countries/territories. A majority of ICBC overseas branches are main participants in offshore RMB market. In Laos, Bank of Lao PDR ("Central Bank") announced in June 2012 that ICBC Vientiane Branch was the sole RMB-clearing bank in the country acting on behalf of the central bank, representing recognition of Laotian regulatory authority to ICBC's strength in RMB business. In London, ICBC was the first Chinese bank to issue RMB certificate of deposit ("CD"), filling the gap of RMB CD in London market. ICBC defended its position as the largest RMB market maker in Moscow by capturing almost 70% market share in RMB-Rouble trades in Moscow Interbank Currency Exchange. In Hong Kong, ICBC was the first Chinese bank to become a market maker for offshore RMB futures trades. Today, the average daily settlement volume of ICBC accounts for 20% of the total in offshore RMB futures market in Hong Kong. In Singapore, Malaysia, Cambodia, ICBC issued dual-currency credit cards (SGD/RMB, MYR/RMB and USD/RMB respectively), the first RMB dual-currency credit cards available in local markets that provided additional fuel to the development of overseas RMB retail banking business.

ICBC, being a large bank specialized in RMB business, has the unique advantages in moving forward the service across the border, said industry insiders. First, ICBC sits on the top of the global ranking in terms of total RMB assets and settlement volume. Supported by strong RMB capital position, ICBC ensures greater access to customers for RMB funds and offers competitive rates. In IT support, ICBC is the first commercial bank in the country to centralize processing of all transactions from domestic and overseas. The real-time clearing system for transfer, settlement, clearing and the centralized clearing in home and foreign currencies connect ICBC outlets across the globe under one roof and enable real-time transfer of funds, offering fast and highly efficient settlement services for all customers, as well as a solid foundation for ICBC to become a globe RMB clearing bank. In terms of service capacity, today, ICBC has a comprehensive portfolio of cross-border RMB products that caters to customer needs, encompassing retail banking, fund clearing, trade finance, global cash management, special finance, investment banking, bank card, internet banking and asset management. Different product portfolios can be offered to different customers.