The Industrial and Commercial Bank of China (ICBC) announced on Tuesday its inauguration of RMB clearing bank services in Singapore, together with its newly established major business hubs, including Private Banking Hub, Commodity and Structured Trade Finance Hub, and Cash Management Hub.

The company said the three new hubs are focusing mainly on RMB related businesses and offer cross-border RMB products covering areas such as retail banking, funds settlement, trade finance, global cash management and asset management, etc.

On Feb. 8, the People's Bank of China designated the Singapore branch of the ICBC as the yuan-clearing bank in Singapore. Singapore is also the first regional financial center outside China to have a yuan clearing bank. In China's Hong Kong and Taiwan, the local units of the Bank of China had been picked to clear yuan transactions in 2004 and 2012, respectively.

Earlier in last June, Ong Chong Tee, deputy managing director of the Monetary Authority of Singapore (MAS), said at a seminar that the pool of yuan deposits in Singapore was estimated to be around 60 billion yuan (9.68 billion U.S. dollars).

Then a serie of fruitful collaborations between the central banks of both countries have been announced. In last October, MAS extended Qualifying Full Bank privileges to ICBC and Bank of China as part of the China-Singapore Free Trade Agreement.

The Singapore Exchange said it is ready to quote, trade, clear and settle RMB-denominated securities. Last month, the two central banks doubled the size of their bilateral currency swap facility from 150 billion yuan (24.2 billion U.S. dollars) to 300 billion yuan (48.4 billion U.S. dollars).

Meanwhile, the demand for yuan in cross-border trade settlement and yuan-denominated investment products in Singapore has been strong, and several companies already issued yuan-denominated bonds.

Ravi Menon, Managing Director of the MAS, said in the ICBC's inauguration ceremony here that "offshore RMB activities in Singapore will be underpinned by the strong and growing trade flows between the region and China."

According to Ravi Menon, the two countries have bilateral trade exceeding 80 billion U.S. dollars, while the trade between China and ASEAN also recorded at 400 billion U.S. dollars. "This large and growing cross border trade will fuel greater RMB trade settlement activity in Singapore over time. The RMB clearing bank will be an important channel for RMB liquidity to circulate between Singapore and China." he said.

In financing aspect, Ravi Menon also said, with the existing RMB-denominated bonds, Singapore will see "the range of RMB- denominated product offerings to expand, as regional corporates raise RMB financing through bond issuances and equity listings, to tap on the strong investor base in the region."

Jiang Jianqing, ICBC Chairman and Executive Director, said at the event that ICBC Singapore will provide to participating banks in Singapore safe, quality and efficient RMB clearing services, offer value-added services such as RMB deposit, inter-bank lending, account overdraft and secured financing;

He also added the new clearing bank service will provide comprehensive cross-border RMB settlement and financing services based on the salient trading characteristics and specific requirements of companies in Singapore, which will further enhance the economic ties between China and Singapore as well as the ASEAN region.

According to the ICBC, the cross-border transactions of ICBC domestic and overseas institutions have exceeded 1.53 trillion yuan (247 billion U.S.dollars) in 2012, up nearly 70 percent from previous year and the RMB clearing network covers up to 70 countries and regions in the world.

ICBC Singapore Branch, established in 1993, had its assets reaching 15.3 billion yuan (2.47 billion U.S. dollars) as of the end of last year, and the RMB settlement in that year was over 94. 0 billion yuan (15.2 billion U.S. dollars), surging 107 percent on year.