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ICBC’s Inauguration of RMB Clearing Bank Services in Singapore

ICBC announce on 2 April 2013 its inauguration of RMB clearing bank services in Singapore. With the RMB clearing bank services, commercial banks in Singapore and other regions in the world can carry out RMB transactions via account opened at ICBC Singapore Branch directly and benefit from the increased efficiency and convenience of the international usage of RMB.  Prior to this, on 8 February 2013, the People’s Bank of China authorized ICBC Singapore Branch to be the RMB Clearing Bank in Singapore. This is the first time the Chinese Central Bank has appointed a RMB Clearing Bank in a country outside of China , marking another significant step in the internationalization of RMB.

Leveraging on the strengths of RMB Clearing Bank, ICBC Singapore Branch established 3 major business hubs namely Private Banking Hub, Commodity and Structured Trade Finance Hub, and Cash Management Hub, focusing mainly on RMB related businesses and offers cross-border RMB products covering areas such as retail banking, funds settlement, trade finance, global cash management and asset management, etc.

ICBC Chairman and Executive Director, Mr Jiang Jianqing, at the “Singapore RMB Clearing Bank and 3 Business Hubs Inauguration Ceremony” held that day said that ICBC Singapore branch, as the first overseas RMB Clearing Bank, will coordinate closely with the People’s Bank of China and Monetary Authority of Singapore, will duly perform its duties and responsibilities as RMB Clearing Bank in accordance with directives and policies of both Central Banks in the 2 countries. ICBC Singapore will provide to participating banks in Singapore safe, quality and efficient RMB clearing services; offer value-added services such as RMB deposit, inter-bank lending, account overdraft, secured financing, etc.; provide convenience to participating banks and pro-actively develop the RMB clearing bank market.  At the same time, ICBC will leverage on its extensive ICBC domestic and overseas network, provide comprehensive cross-border RMB settlement and financing services based on the salient trading characteristics and specific requirements of companies in Singapore. . This will further enhance the economic ties between China and Singapore as well as the Asean region.  As the Singapore Offshore RMB market becomes more developed in future, ICBC will provide more innovative products in the RMB capital market and also in the area of derivative trading products.

As pointed out by an industry player, Singapore possesses unique strengths in establishing its offshore RMB centre.  Singapore is not only the world’s 4th largest international financial centre; it is also Asia’s 2nd largest foreign exchange centre after Tokyo; its economic, legal and regulatory environments are sound; its financial system is stable and highly efficient; and it has accumulated rich experience in financial management and operation.  At the same time, Singapore is an important trading market in Asia for oil and commodities, it is an international trading hub. In year 2012, China-Singapore bilateral trade totaled S$104 billion and China has become Singapore’s 3rd largest trading partner.  These factors have created a very favorable foundation for the development of the cross-border RMB business in  Singapore region.

In recent years, the Singapore RMB market has developed rapidly, and various international and Singapore local banks have launched RMB deposit, loan products.  As at end June 2012, Singapore RMB deposit balances have reached RMB60 billion, closely after China mainland and Hong Kong region; cross-border RMB volumes handled is behind Hong Kong, ranked second in overseas region.  On 7 March 2013, the People’s Bank of China and Monetary Authority of Singapore signed China-Singapore local currency swap agreement valued at RMB300 billion / S$60 billion.  Besides, Singapore is the only international financial centre in Asean region; its geographical and cultural advantages are obvious; its RMB service offering can cover the entire Asean region; and the inauguration of the Singapore RMB Clearing Bank is of important significance in promoting the widespread use of RMB in trade between China and Asean.

As the world’s largest RMB bank, ICBC is committed to expand its RMB business to extend its strong RMB service capability to the overseas market.  In terms of funding strength, ICBC RMB total assets and settlement business volume ranks steadily as No.1 in the world; it can provide customer with adequate RMB financing funds and competitive interest rate.  In terms of technology system support, ICBC is the first Chinese commercial bank to implement centralized system for both its domestic and overseas RMB business via real-time centralized clearing system for collection, settlement, clearing as well as local and foreign currency centralized clearing; it links up all its branches operating all over the world via its centralized system for real-time credit of funds transfers  provides customers with convenient, fast and efficient settlement services This enables ICBC to establish a firm foundation in building a global RMB Clearing Bank.

As at end of 2012, ICBC has already established close to 400 overseas institutions in 39 countries and regions around the world; at the same time it is the largest shareholder of the Standard Bank of South Africa. ICBC has further penetrated financial markets of 18 countries in Africa, hence forming a strong international settlement and clearing network.  Since year 2009 when the cross-border RMB settlement pilot scheme started, ICBC leveraged on its global network aggressively promoted the use of cross-border RMB; the scope of the business continues to expand, and the pace of growth remains very strong.  From statistical records, in year 2012 the cross-border transactions of ICBC domestic and overseas institutions have exceeded RMB1.5 trillion, up nearly 70% from previous year; and the RMB clearing network covers up to 70 countries and regions in the world.

ICBC Singapore Branch was established in 1993, and was ICBC’s first overseas branch.  Over the last 20 years of its development, Singapore Branch has achieved long-term growth in many areas such as international settlement, trade finance, global cash management, cross-border RMB business, credit card, electronic banking, etc., and in year 2012 it was awarded Qualifying Full Bank License by Monetary Authority of Singapore. The importance of the development and promotion of RMB business in Singapore has always been a priority for the branch.  In year 2003, it was the first bank in Singapore to launch Personal RMB Fixed-Rate Remittance and provided RMB exchange services, etc.  In recent years, Singapore Branch seized the opportunity arising from the policy strategy on cross-border RMB business development , successfully launched a series of products such as RMB settlement, RMB trade finance, RMB salary credit, RMB / SGD dual currency credit card, etc. based on customers’ requirements and opened the first RMB Processing Centre in Singapore March 2011, establishing its leading position in the Singapore RMB market.  As at end of 2012, ICBC Singapore Branch RMB assets have reached RMB15.3 billion, and the RMB settlement in that year was over RMB94.0 billion, a large 107% increase over the previous year.