BoCHK to be clearing bank for RMB business

The Bank of China (Hong Kong) Limited (BoCHK) has been appointed the clearing bank for renminbi (RMB) business in Hong Kong for three years.

The Hong Kong Monetary Authority (HKMA) announced today (December 24) that it had been notified of the decision by the People's Bank of China (PBoC). Six Hong Kong banks submitted proposals to PBoC in the selection process.

The acting Chief Executive of the HKMA, Mr Norman Chan, welcomed the appointment.

"With its considerable experience in clearing and cross-border businesses, the Bank of China (Hong Kong) is well placed to launch reliable and efficient RMB clearing services for Hong Kong banks in the very near future," he said.

"The HKMA will work closely with the PBoC and BoCHK to facilitate the phased launch of the personal RMB business by Hong Kong banks."

Last month, the Chief Executive, Mr Tung Chee Hwa, announced that following approval from the State Council, the People's Bank of China had agreed to provide clearing arrangements for personal RMB business in Hong Kong. The scope of the business will include deposit-taking, exchange, remittances and RMB cards. The major responsibilities of the clearing bank are to:

* open RMB settlement accounts for participating banks for the acceptance and withdrawal of RMB funds;

* open a settlement account with the PBoC's Shenzhen Sub-branch to centralise the acceptance and withdrawal of RMB funds of the clearing bank and the participating banks;

* collect and distribute RMB banknotes;

* provide clearing services for RMB remittances and RMB cards issued by Hong Kong banks; and

* provide services for the participating banks to square their RMB open positions that result from the exchange of RMB into Hong Kong dollars and vice versa.

Hong Kong banks were invited to apply to become the clearing bank. The selection criteria included experience in the provision of clearing services; a sound system network; knowledge of the financial policies and regulations of the two jurisdictions; and competence in providing high-quality clearing service.

Ends/Wednesday, December 24, 2003