The Chief Executive, Mr Tung Chee-hwa, has announced today (18 November) that, following approval from the State Council, the People's Bank of China (PBoC) has agreed to provide clearing arrangements for banks in Hong Kong to conduct personal renminbi (RMB) business on a trial basis. The scope of RMB business to be offered will be confined to transactions that facilitate personal spending but do not involve investment and other capital account transactions.
The scope of RMB business to be offered on a trial basis includes the following four areas:
- Deposit-taking: Hong Kong licensed banks participating in RMB business (participating banks) may offer RMB deposit-taking services to Hong Kong residents. The interest rates and the terms of deposits are to be determined by the participating banks.
- Exchange: Participating banks may offer to holders of RMB deposit accounts a service for converting RMB into Hong Kong dollars and vice versa. The maximum amount that can be exchanged per person per day is the equivalent of RMB20,000. For individuals who are not holders of RMB deposit accounts, the maximum amount that can be exchanged is RMB6,000 equivalent per transaction. Participating banks may also offer services to business people engaged in retail sales, catering, accommodation and other services related to personal consumption for the exchange of their RMB receipts into Hong Kong dollars.
- Remittances: Participating banks may offer to holders of RMB deposit accounts a service for remitting from their Hong Kong accounts RMB funds to bank accounts under the same name on the Mainland. The maximum amount to be remitted is RMB50,000 per person per day.
- Renminbi Cards: Mainland residents may use RMB debit cards and credit cards issued by Mainland banks for spending in Hong Kong. Participating banks or their subsidiaries may also issue RMB debit cards and credit cards to residents of Hong Kong for use on the Mainland.
Under this RMB business scheme, participating banks will, after setting aside appropriate amounts of funds for meeting withdrawals, place the RMB funds absorbed from their depositors with a designated Hong Kong licensed bank (the clearing bank) to be appointed by the PBoC for providing RMB clearing services in Hong Kong. The clearing bank will, after setting aside an appropriate amount of RMB funds, deposit all RMB funds absorbed from its own depositors and other participating banks with the PBoC Shenzhen Sub-Branch. The PBoC Shenzhen Sub-Branch will pay interest to the clearing bank on the deposits. The clearing bank will also pay interest on the deposits from the participating banks, which will in turn pay interest to their depositors. The PBoC will invite banks interested in taking up the role of clearing bank to submit applications for such a position through the Hong Kong Monetary Authority.
The Financial Secretary, Mr Henry Tang, welcomed the arrangements for conducting in Hong Kong personal RMB business on a trial basis. He said, "the arrangements for banks to conduct renminbi business on a trial basis signify an important step forward for the development of our banking sector. This will help promote economic integration between Hong Kong and the Mainland, and facilitate cross-border tourist spending. I believe that the banking sector in Hong Kong will seize on this opportunity and provide the relevant renminbi services to the public in the near future."
The Chief Executive of Hong Kong Monetary Authority (HKMA), Mr Joseph Yam, said, "the arrangements for Hong Kong banks to conduct renminbi business will open a new channel for the flow of renminbi funds between Hong Kong and the Mainland through the banking system. In addition to meeting the demands of the market and the public, the Hong Kong banking sector will also be able to develop new areas of business. This will be advantageous to the Hong Kong banking sector and increase its competitiveness. In the long term, this development will have great significance for developing Hong Kong as an international financial centre. The HKMA will work closely with the PBoC to facilitate banks in Hong Kong launching the renminbi business as soon as possible."
For further enquiries, please contact:
Jasmin Fung, Manager (Press), at 2878 8246 or
Kevin Ip, Manager (Press), at 2878 1687
Hong Kong Monetary Authority
18 November 2003
