The People's Bank of China Appoints Clearing Bank for RMB Business in Hong Kong

The Hong Kong Monetary Authority (HKMA) announced today (Wednesday) that it had been notified by the People's Bank of China (PBoC) of its decision, following a selection process, to appoint Bank of China (Hong Kong) Limited (BoCHK) as the Clearing Bank for renminbi (RMB) business in Hong Kong. The term of appointment is three years.

Mr Norman Chan, Acting Chief Executive of the HKMA, welcomed the appointment of BoCHK as Clearing Bank. "With its considerable experience in clearing and cross-border businesses, BoCHK is well placed to launch a reliable and efficient RMB clearing services for Hong Kong banks in the very near future. The HKMA will work closely with the PBoC and BoCHK to facilitate the launch, in phases, of the personal RMB business by Hong Kong banks very shortly."

The Chief Executive of the Hong Kong Special Administrative Region, Mr Tung Chee-hwa, announced on 18 November 2003 that, following approval from the State Council, the PBoC had agreed to provide clearing arrangements for the personal RMB business in Hong Kong. The scope of such RMB business will include deposit-taking, exchange, remittances and RMB cards. The major responsibilities of the Clearing Bank are to:

• open RMB settlement accounts for participating banks for the acceptance and withdrawal of RMB funds
• open a settlement account with the PBoC's Shenzhen Sub-branch to centralise the acceptance and withdrawal of RMB funds of the Clearing Bank and the participating banks
• collect and distribute RMB banknotes
• provide clearing services for RMB remittances and RMB cards issued by Hong Kong banks
• provide services for the participating banks to square their RMB open positions that result from the exchange of RMB into Hong Kong dollars and vice versa.

In his letter of 19 November, the Governor of the PBoC, Mr Zhou Xiaochuan, invited Hong Kong banks via the HKMA to apply to become the Clearing Bank for RMB business. The following selection criteria were mentioned: experienced in the provision of clearing services; possessing a sound system network; knowledgeable in the financial policies and regulations of the two jurisdictions; competent in providing high-quality clearing service. Subsequently seven Hong Kong banks expressed interest, with six of them submitting proposals. Having assessed the proposals submitted, the PBoC has decided to appoint BoCHK as the Clearing Bank for a term of three years. The PBoC will consult the HKMA and conduct regular appraisals in relation to the services provided by the Clearing Bank.

For further enquiries, please contact:
Jasmin Fung, Manager (Press), at 2878 8246 or
Kevin Ip, Manager (Press), at 2878 1687

Hong Kong Monetary Authority
24 December 2003