Chinese regulators to improve banks' digital services for capital account-related cross-border fund settlement biz

Chinese central bank and the State Administration of Foreign Exchange (SAFE) unveiled on June 16 an opinion-soliciting circular to require banks to improve their digital services for capital account-related cross-border fund settlement business, reported Xinhua Finance.

The People's Bank of China (PBOC), the central bank and SAFE said in their notification for the circular that they took the move to facilitate related business dealing by market entities.

Since June 2021, SAFE has approved gradually five domestic banks to carry out the pilot capital account digital services to better serve the real economy and reaped active market feedback.

On basis of the experience obtained from the pilot work, SAFE drafted a circular to improve the digital services for capital account-related foreign exchange (forex) business of banks and mulled application of the pilot digital services across the country. During the opinion inviting process for the circular of SAFE, certain commercial banks suggested including cross-border Renminbi (RMB) settlement services into the pilot capital account digital services.

Under such circumstances, PBOC and SAFE jointly drafted the circular to expand the coverage of capital account digital services of banks from foreign exchange business under the capital account to cross-border fund settlement business under the capital account.

The circular specifies application of the integrated management of local and foreign currencies to banks' capital account-related digital cross-border fund settlement services. Under the premise of abiding by related capital account business review and archive management principles, banks are allowed to provide market entities with related online capital account services via reviewing electronic documents.

All the cross-border fund settlement business under the capital account that can be handled offline by banks are included into the digital services herein and banks are permitted to select and treat digitally related business within the allowed digital services scale, according to the circular.

At the same time, bank headquarters are required to establish complete digital services business management mechanisms, build related systems and authorize pursuant to actual situations their branches to carry out related capital account digital services. 

Timely, complete and precise reporting of international payment and receipts statistics and reporting and submission of data to the RMB Cross Border Payment & Receipt Management Information System (RCPMIS) by banks are also required when they provide digital services for capital account-related cross-border fund settlement business.