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China Launches Renminbi Cross-border Interbank Payment System

The rapid growth of cross-border Renminbi payment and settlement places increasingly higher demands on the financial infrastructure. The first phase of the Cross-border Interbank Payment System (CIPS) developed by the People's Bank of China (PBOC) was launched on 8 October 2015, seven years after China first embarked on Renminbi internationalisation. The new system provides clearing and payment services for financial institutions in cross-border and offshore Renminbi businesses.  

The launch of this system will help improve the efficiency of cross-border Renminbi settlements, boost the global use of the Chinese currency, play a significant role in shoring up China's real economy, and promote domestic enterprises "going out", said PBOC deputy governor Fan Yifei at the ceremony marking the launch.

According to PBOC, the system enables the real-time gross amount settlement of fund transfer of both individual customers and financial institutions. It will operate between 9 a.m. and 8 p.m. Beijing time on China's statutory workdays. All direct participating banks have dedicated access to the system, thus shortening the clearing process and improving efficiency. The use of international messaging standards facilitates the straight-through processing of cross-border businesses.

The Provisional Rules for the Operation of Renminbi Cross-border Interbank Payment System issued by PBOC provides the institutional framework for the steady operation of the system by setting the access criteria of participants, as well as the account management and business processing requirements. The Cross-border Interbank Payment and Clearing (Shanghai) Corporation Ltd has been established to operate the CIPS independently under the supervision and management of PBOC.

The first group of 19 direct participating banks of CIPS consists of both Chinese and foreign banks. They include: Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, China Merchants Bank, Pudong Development Bank, China Minsheng Bank, Industrial Bank, Ping An Bank, Huaxia Bank, HSBC (China), Citibank (China) and Standard Chartered Bank (China). In addition, 38 Chinese banks and 138 foreign financial institutions from Asia, Europe, Oceania, Africa and other regions are indirect participants of the system.

Content provided by Picture: HKTDC Research
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