Renminbi Clearing System in Hong Kong

Service Overview

To cater for the expanded banking business, Hong Kong Interbank Clearing Limited (“HKICL”) was engaged by Bank of China (Hong Kong) Limited (“BOCHK”), the Clearing Bank for RMB business in Hong Kong (“CB”), to develop a Renminbi Settlement System (“RSS”)

On 1 November 2005, the People’s Bank of China (“PBoC”) announced the expansion of Renminbi (“RMB”) banking business in Hong Kong. To cater for the expanded banking business, Hong Kong Interbank Clearing Limited (“HKICL”) was engaged by Bank of China (Hong Kong) Limited (“BOCHK”), the Clearing Bank for RMB business in Hong Kong (“CB”), to develop a Renminbi Settlement System (“RSS”), which was launched on 6 March 2006, providing participants of the system with the RMB cheque clearing service and the following real-time RMB payment services:

 
  • RMB position-squaring
  • Remittance processing
  • RMB bank card payment

Banks in Hong Kong and credit card subsidiaries of banks that have been permitted by the CB and the Hong Kong Monetary Authority can join the RSS. Each RMB clearing member has to maintain a settlement account with the CB.

 

HKICL is also appointed by BOCHK to act as the system operator of the RSS, and has coordinated with Guangzhou Electronic Banking Settlement Centre and Shenzhen Financial Electronic Settlement Centre Co., Ltd to offer the cross-border joint clearing services to participants of the system i.e. the clearing of RMB cheques drawn on banks in Hong Kong and presented to banks in Guangdong Province including Shenzhen.

 

On 16 January 2007, PBoC announced the expansion of clearing arrangements for the new category of RMB business in Hong Kong. Financial institutions in Mainland China, upon appropriate approval, can issue RMB-denominated bonds in Hong Kong. The introduction of the new category of RMB business brings in new market participants to Hong Kong’s bond market and provides new choices for RMB investment by Hong Kong individuals and enterprises. It helps to enhance the status of Hong Kong as an international financial centre. With the introduction of the new features, the RSS has been transformed into a full-fledged RMB RTGS system which supports the following additional services:

 
  • RMB interbank funds transfer
  • RMB local cheque clearing and settlement (including demand drafts, cashier's orders and remittance advices, etc.)
  • RMB cross-border joint cheque clearing
  • Delivery versus Payment (“DvP”) for RMB denominated bonds through a linkage with Central Moneymarkets Unit
  • Automated remittance of RMB funds relating to issuance of RMB bonds
  • Electronic bulk clearing and settlement of RMB Central Clearing and Settlement System (“CCASS”) items, RMB Investor Account Holder (“IAH”) items and Special CCASS items ("SCI"), i.e. money settlement instructions related to RMB CCASS (both same day and next day settlement), RMB IAH and RMB SCI
  • Electronic bulk clearing and settlement of RMB EPSCO items (both same day and next day settlement)
  • Electronic bulk clearing and settlement of RMB Autodebit items and RMB same day settlement Autocredit items
  • Electronic bulk clearing and same day settlement of RMB electronic bill payment and electronic donation items
  • RMB electronic cheque (“e-Cheque”) clearing and settlement

Remarks

There have been continued enhancements made to the RMB RTGS with a view to strengthening Hong Kong's offshore RMB market. The daily operating hours of the RMB RTGS has been extended from the original window between 08:30 hours and 18:30 hours to a new window between 08:30 hours to 23:30 hours from 25 June 2012; and the cut-off time has been further extended to 05:00 hours on the next calendar day on 20 July 2015, covering business hours in Europe and the Americas. The RMB RTGS is now open on special Saturdays and Sundays which are designated as working days in Mainland China with operating window between 08:30 hours and 21:00 hours.