Singapore is to grant full banking licenses to two Chinese banks currently operating in the city-state, one of which will act as a clearing bank for renminbi (RMB) transactions according to the Ministry of Trade and Industry.
In a statement, the Singaporean government department said that the decision formed part of an agreement to enhance banking services cooperation with Beijing under the existing China-Singapore Free Trade Agreement. To reciprocate, Beijing will “expeditiously process” applications made by selected Singapore banks for setting up branches and sub-branches in China.
“Implementation details will be worked out by the relevant financial agencies in Singapore and China in due course,” added the ministry, which did not name the Chinese banks chosen to receive Qualifying Full Bank licences (QFBs). Chinese banks operating in Singapore include Bank of China, China Construction Bank and Industrial and Commercial Bank of China, which are all likely contenders.
Earlier this month it was announced that Singapore will consider awarding new QFBs as part of negotiations for free trade agreements. It also said foreign banks with a relatively large share of local deposits will have to incorporate locally.
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