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HONG KONG - Standard Chartered Bank (China) was granted for approval for a renminbi denominated loan quota on behalf of an American multi-national company client, making it the first foreign bank which has done so, the company said in Hong Kong on Monday.
The approval of the 3.3 billion yuan ($530 million) cross-border lending quota from People's Bank of China Shanghai Branch is part of a pilot program that supports foreign and local MNCs which have plans to channel surplus renminbi capital on the Chinese mainland to fund renminbi denominated activities overseas.
Citizens pass by a Standard Chartered bank inHong Kong, Aug 15, 2012. [Photo/Xinhua]
The scheme has transformed the lending of renminbi between companies from one based on a traditional entrustment loan (with banks as intermediary agents) to one where two parties sign lending agreements directly, agree interest rates and manage the loan drawdown themselves.
Anthony Lin, managing director and head of Transaction Banking at Standard Chartered Bank (China) said renminbi cross-border lending brings huge flexibility of corporate treasury management, allowing them to negotiate lending frequency and rate according to their actual needs.
He said it also enables corporations to transfer onshore renminbi surplus to their global cash pools for central deployment and use, hence to improve their global treasury efficiency.