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The People's Bank of China (PBC), the country's central bank, announced on Tuesday to further expand its position squaring and clearing services to banks in Hong Kong that engage in Renminbi (RMB) business.
"With steady progress in the RMB business in Hong Kong and in order to create more favorable conditions for its further development," the PBC Shenzhen Sub-Branch will accept RMB deposits of the clearing bank, and RMB deposits accepted by the clearing bank will not only comprise of personal RMB deposits of Hong Kong residents, but also the RMB deposits of the designated merchants taken by the participating banks, the central bank said.
The clearing bank will provide services for the participating banks to square their RMB open positions that result from the following extended RMB exchange business:
a. Cash exchange limit is increased from not exceeding RMB 6,000 yuan (US$742) to no more than RMB 20,000 yuan (US$2,473) equivalent per transaction for individuals.
b. Designated merchants eligible to RMB business are expanded to include those engaged in the provision of transportation, telecommunication, medical and educational services.
c. Designated merchants may exchange their RMB deposit accounts in the participating banks unilaterally to Hong Kong dollars.
Mainland banks qualified for conducting personal RMB business may receive, through the clearing bank, RMB remittances from Hong Kong residents up to a maximum of RMB 80,000 yuan (US$9,895) per person per day, increased from the previous level of RMB 50,000 yuan (US$6,184) per person per day. The beneficiary of the remittance should be the person who remits the funds.
The clearing bank will provide clearing services for the RMB checks used by the Hong Kong residents. The Hong Kong residents may use RMB checks to pay consumption spending in Guangdong Province, subject to a limit of RMB 80,000 yuan (US$9,895) per account per day, and shall not endorse and transfer the checks to other parties.
The credit limit of RMB 100,000 yuan (US$12,369) imposed on RMB cards issued by the Hong Kong banks will be removed, the central bank said.
(Xinhua News Agency November 1, 2005)
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