HSBC has issued its first renminbi (RMB)-denominated documentary credit (DC) in India for a Mumbai-based pharmaceuticals company.
A DC is a commitment issued by a bank to pay a supplier within a prescribed time limit as long as clearly defined terms and conditions have been met. DCs can safeguard traders against cash flow issues, ensuring that the terms of payments between two parties are met.
“Indian businesses have long-recognised the enormous growth potential of doing business with suppliers in China,” said Sandeep Uppal, managing director and head of commercial banking, HSBC India. “HSBC’s research estimates that approximately US$2 trillion, or a third of China’s annual trade, will be settled in RMB by 2015.
“Momentum is building fast as more than 10% of China’s trade was settled in RMB in the first quarter of 2012. As trade between these two economic powerhouses gathers pace, Indian businesses that use DCs in RMB can expect increased discounts from their Chinese suppliers who no longer need to hedge against the US dollar.”
According to HSBC’s Global Connections Report, China is India’s largest import partner with growth between the two countries projected to increase by 11% annually over the next five years. The report also identifies China as India’s third largest export partner with annualised growth rates at 10% over the next five years. Iron ore, copper and cotton lead these exports.
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.
Despite being behind the likes of Europe and China, the US payments industry is now rapidly advancing, said Anish Kapoor, CEO of AccessPay told GTNews in an exclusive interview.
Treasurers are more interested in cross-border payments and automation than real-time payments, as they are consistently asked to do more with less, argues Rick Burke, head of corporate payments at TD Bank in an exclusive interview.
The top five sectors Asian fintech investors are interested in are data analytics, blockchain, lending, payments and regtech, according to Gary Hwa, EY regional managing partner.