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The following is issued on behalf of the Hong Kong Monetary Authority:
The Hong Kong Monetary Authority (HKMA) welcomed today (March 31) the launch of the Renminbi (RMB) Fiduciary Account Service, which is a new arrangement to facilitate Participating Banks to better manage their credit exposure to the Clearing Bank for RMB business in Hong Kong.
In November last year, the Hong Kong Association of Banks raised the issue of credit limit against the background of an 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 discussed with the People's Bank of China (PBoC) and it was considered that the issue could be resolved by providing an option for Participating 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 had 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 completed, the RMB Fiduciary Account Service is available to the Participating Banks, in addition to placing funds in their settlement accounts maintained with the Clearing Bank.
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 is also issuing a circular to Authorised Institutions today on the prudential treatment of balances maintained in the RMB Fiduciary Account.
Ends/Thursday, March 31, 2011
Issued at HKT 16:43
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