HSBC Bank (China) Company Limited ("HSBC China") today launched a centralised renminbi ("RMB") cross-border transaction management solution for its corporate clients in the China (Shanghai) Pilot Free Trade Zone ("Shanghai FTZ") by delivering the new service to Saint-Gobain via its subsidiary in the pilot zone.
This innovative cash management solution covers functions including pay-on-behalf and receive-on-behalf ("POBO/ROBO") and netting.
HSBC is one of the first banks to launch this solution in the Shanghai FTZ, marking another milestone in the development of the zone's financial services industry following the Bank's recent launch of RMB two-way cross-border sweeping. Saint-Gobain is among the first batch of multinational corporations to implement this solution in the Shanghai FTZ.
Saint-Gobain, the world leader in the habitat and construction markets, designs, manufactures and distributes high-performance building materials, providing innovative solutions to the challenges of growth, energy efficiency and environmental protection. Since entering China in 1985, Saint-Gobain has invested over EUR2 billion in the market and grown the business rapidly. Via its subsidiary in the Shanghai FTZ, it is able to centralise payments and collections for merchandise and services trade settlement, along with other current account items, and subsequently improve the efficient use of RMB settlement within the group. This solution thus also enhances the cash management efficiency for its Asia Treasury Centre located in Shanghai.
Centralised payments and collections is an efficient cash management solution for multinational companies' need to manage intra-group account payables and receivables. The newly-launched scheme in the Shanghai FTZ now applies to RMB cross-border settlement, enabling corporates to consolidate and offset account payables and receivables through a single transaction.
Kee Joo Wong, Head of Global Payments and Cash Management of HSBC China, said: "Centralised RMB cross-border payments and collections will bring significant benefits to our clients by simplifying their payment processes, reducing the number of transactions and unlocking additional liquidity. It therefore helps improve the efficiency of funding management and settlement, reducing funding cost and foreign exchange risk. As demonstrated by our innovative cash management solutions launched recently, HSBC China continues to explore financial solution breakthroughs for corporates in the Shanghai FTZ and across China. HSBC's global network and international financial expertise will continue to advance our efforts in supporting our customers' business growth under the prevailing regulatory framework within the zone."
In December 2013, China unveiled a series of financial policy guidelines under which corporates in the Shanghai FTZ can conduct centralised payments and collections
between associated onshore and offshore entities.
HSBC has been actively preparing for new opportunities to provide innovative and value-added financial services in the Shanghai FTZ since the pilot zone was established, and continues to drive product and service innovation in areas like cash management to support the needs of its corporate customers in the zone. Last month, HSBC China launched RMB two-way cross-border sweeping in the Shanghai FTZ.
As the largest international bank in mainland China, HSBC China continues to stand at the forefront of RMB cross-border business and other financial market innovations.