Singapore has taken a step closer to becoming a major offshore yuan (CNH) hub, with the official inauguration of the Industrial and Commercial Bank of China (ICBC) as the clearing bank for CNH yuan in the city state.
A memorandum of understanding (MoU) between the Monetary Authority of Singapore (MAS) and the People’s Bank of China (PBOC) was signed, framing cooperation between both regulatory bodies in reviewing the conduct of CNH-denominated business and clearing arrangements.
Singapore has become the first country outside Greater China to host a CNH-clearing bank, boosting its efforts to compete with rival financial hubs, such as London and Sydney, for a greater share of the CNH market.
Reports on Singapore potentially becoming the second CNH centre after Hong Kong surfaced in 2011 amid China’s growing intention to globalise its currency, also known as renminbi (RMB). The breakthrough came last July last year, when Singapore granted Qualifying Full Bank (QFB) privileges to the local branches of ICBC and Bank of China. In February, the PBOC named ICBC’s branch in Singapore as the clearing bank for CNH in the region.
ICBC announced the inauguration of its RMB clearing bank services in Singapore, together with its newly established major business hubs, including private banking, commodity and structured trade finance and cash management. The bank said the three new hubs are focusing mainly on RMB related businesses and offer cross-border RMB products covering areas such as retail banking, funds settlement, trade finance, global cash management and asset management.
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