Hong Kong Introduces RMB Fiduciary Account Service
Monday, April 04, 2011
The Hong Kong Monetary Authority (HKMA) has welcomed the launch of the Renminbi
(RMB) Fiduciary Account Service, which is a new arrangement to help participating
banks to better manage their credit exposure to the Clearing Bank for RMB business
in Hong Kong.
An issue of credit limits was raised in November last year concerning the increasing
amount of RMB deposits being placed by participating banks with the Clearing
Bank as RMB business in Hong Kong continued to expand and deepen. The HKMA had
discussions with the People's Bank of China (PBoC) and it was considered that
the issue could be resolved by providing an option for the banks to place RMB
funds through the Clearing Bank under a custody arrangement for onward depositing
with the PBoC.
In the past few months, the HKMA has worked closely with the PBoC and the Clearing
Bank on the detailed arrangements, including the legal documents and operational
procedures. With the necessary preparations having been completed, the RMB Fiduciary
Account Service is now available to the participating banks, in addition to
placing funds in their settlement accounts maintained with the Clearing Bank.
An HKMA spokesperson said: "The launch of the RMB Fiduciary Account Service
provides the solution to address the issue of credit limit faced by participating
banks relating to the RMB funds placed with the Clearing Bank. It is a useful
enhancement necessary to support the continuous expansion of RMB business in
Hong Kong."
The HKMA also issued a circular to authorized institutions on March 31 on the
prudential treatment of balances maintained in the RMB Fiduciary Account. |
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