Shenzhen Bank of China has launched the first batch of RMB capital settlement business under the "30 Financial Support Measures for Qianhai"
Recently, under the guidance of the Shenzhen Central Branch of the People's Bank of China and the Shenzhen Qianhai Shenzhen Hong Kong Modern Service Industry Cooperation Zone Management Bureau, Bank of China Shenzhen Branch (hereinafter referred to as "Shenzhen Bank of China") successfully handled RMB capital account entry and settlement services for two enterprises, supporting enterprises to directly collect overseas capital contributions through RMB basic/general accounts without opening a RMB capital account. This business is another innovative measure taken by Bank of China in Shenzhen to implement the relevant policies of "Financial Support Qianhai 30 Articles" after the first batch of overseas foreign exchange purchasing business.
On 23 February, the People's Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and the Guangdong Provincial People's Government jointly issued the "Opinions on Financial Support for the Comprehensive Deepening of Reform and Opening up of the Qianhai Shenzhen Hong Kong Modern Service Industry Cooperation Zone" (referred to as the "30 Articles of Financial Support for Qianhai"). The "30 Financial Support Measures for Qianhai" cover cross-border trade and investment and financing facilitation, capital account convertibility, and strengthening regulatory cooperation, among which Article 17 focuses on exploring effective paths for capital account convertibility, It is allowed to pilot the cancellation of RMB capital special deposit accounts for foreign direct investment in the Qianhai Cooperation Zone. On the premise of ensuring that the use of funds meets regulations and the transaction behaviour is traceable, settlement banks can directly handle RMB capital entry and settlement services for qualified foreign investment enterprises in the Qianhai Cooperation Zone, without the need to open RMB capital special deposit accounts. The introduction of this policy provides an institutional basis for facilitating cross-border RMB capital project services for domestic and foreign investment enterprises in the region.
CSO is a foreign-invested enterprise within the Qianhai Cooperation Zone, The relevant person in charge of the company stated: Previously, our company had to open a cross-border RMB capital account in the bank to receive capital transferred from overseas, which increased the cost of account management. After the new policy was introduced, companies did not need to open a separate RMB capital account to process RMB capital transfer. We happened to have a capital transfer in, and after the Bank of China counter reviewed the information, it helped us directly transfer it to the basic account, which greatly improved efficiency. We have been using the capital for daily operation, rendering the liquidity of the entire capital chain much more convenient.
It is reported that in the past, enterprises were required to open a special capital account with the bank in advance for the entry of RMB capital. The cancellation of the special deposit account for foreign direct investment in RMB capital effectively simplified the process of receiving overseas capital contributions, greatly improved the efficiency of cross-border RMB capital account transactions, helped enterprises accelerate capital turnover, and saved account opening fees and operating costs for enterprises.
Since the launch of the new policy, Shenzhen Bank of China has been guided by the "30 Financial Support Measures for Qianhai" policy, combined with the actual development of cross-border RMB business in the Qianhai Cooperation Zone, conducting in-depth research on enterprise needs, and taking the lead in exploring capital account convertibility, deepening Shenzhen Hong Kong financial cooperation, deepening the interconnection of Shenzhen Hong Kong financial markets and infrastructure, assisting the financial industry in opening up to the outside world, and supporting the characteristic financial industry, continuously achieving innovative breakthroughs.
The relevant person in charge of Bank of China in Shenzhen stated that under the guidance of the Shenzhen Central Branch of the People's Bank of China and the Shenzhen Qianhai Shenzhen Hong Kong Modern Service Industry Cooperation Zone Management Bureau, the bank will actively implement the capital project innovation policy by ensuring that the use of funds meets regulations and transaction behaviour can be traced, combined with cross-border investment and financing facilitation measures. Next, the bank will continue to be guided by the "30 Financial Support Measures for Qianhai" policy, improve risk prevention and control efficiency through digital technology, strengthen cross-border financial product research and development, explore new scenarios for cross-border RMB business, and contribute financial strength to promote the development of Qianhai Shenzhen Hong Kong Modern Service Industry Cooperation Zone.
This article has been translated into English. If there is any inconsistency or ambiguity between the English version and Chinese version, the latter one shall prevail.
The full text of the measures, in Chinese, can be found below: