Citi will pilot the first renminbi (RMB) cross-border treasury centre solution in the Shanghai Free Trade Zone (SFTZ), following the launch of its automated RMB cross-border pooling structure in the SFTZ with Swiss healthcare company Roche.
Through Roche’s registered company in the SFTZ, Citi will implement an RMB cross-border payment and receivables on-behalf-of (POBO/ROBO) structure and the world’s first RMB netting structure. The solution will enable Roche to use its SFTZ entity to consolidate all RMB cross-border transactions from domestic participated companies, and settle the net amount with their offshore treasury centre through netting.
Resulting benefits include improvement in the company’s capital utilisation efficiency, reduced cost in cross-border transaction, intragroup financing and foreign exchange (FX) and an expansion of cross-border payment channels. Citi added that the initiative marks a major breakthrough with RMB cross-border treasury centre solutions and is a significant part of the financial reform in SFTZ.
Andrew Au, chief executive (CEO) of Citibank (China) Co, said, “As a testing ground for China to deepen reform, SFTZ is facilitating a faster pace of financial innovation and liberalisation. Citi is deeply committed to this process and pleased to be a leading contributor in this important evolution in China’s financial landscape.”
“Regional treasury centres (RTCs) are the most sophisticated form of treasury management structures, and they provide enormous benefits to companies in terms of visibility, increased working capital efficiency and better risk management,” added Amol Gupte, region head, treasury and trade solutions, Asia Pacific.
“Citi has already implemented best-in-class treasury and liquidity solutions for more than 200 RTCs and in-house banks in Asia Pacific and we are excited to see both Chinese and multinational companies in the SFTZ join in these complex solutions.”
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