Introduction

The RMB clearing bank is a crucial institutional arrangement for facilitating the international use of the renminbi. Designated by the People's Bank of China, Bank of China served as an RMB clearing bank for the longest time and in the largest number of locations among all commercial banks in China. 

BOC steadily and prudently advanced the International Use of RMB, actively leveraging its role as an RMB clearing bank, helping the RMB perform its various functions as an international currency in offshore markets, and assisted the establishment of a strong currency and financial powerhouse.

Enriching RMB application scenarios in capital markets

Hong Kong has a thriving capital market, attracting many mainland-registered enterprises to list on the Hong Kong Exchanges and Clearing (H-share). In February 2023, the China Securities Regulatory Commission stipulated that domestic enterprises issuing and listing securities overseas may raise funds and distribute dividends in foreign currencies or RMB, providing institutional support for H-share companies to pay dividends in RMB. Acting as the dividend-paying bank for a real estate enterprise, Bank of China Hong Kong Limited (BOCHK) assisted the company in understanding policy details and helped it efficiently launch an RMB dividend option for its shareholders. 

On Aug 25, 2023, BOCHK completed the dividend payment. Approximately 27.6 million of the company's H-shares opted for RMB dividends, with a total payout of about 16.89 million yuan ($2.38 million). This move helped reduce the company's dividend currency exchange risk and costs, offered diverse options for investors in the Hong Kong market, and supported the development of Hong Kong through RMB financial services.

Achieving breakthroughs in RMB Denomination and Settlement for commodities

The copper belt spanning the Democratic Republic of the Congo and Zambia is the world's third-largest copper-producing region. Bank of China Zambia Limited has been actively leveraging its role as an RMB clearing bank to promote the use of RMB for the denomination and settlement of commodities in Africa. 

In Aug 2023, BOC Zambia opened an offshore RMB account for a company with 60 per cent of its products sold to China. Together, they conducted a comprehensive review of processes such as customs clearances, tax declarations, and balance of payments in the DRC, helping the company to resolve practical issues encountered in RMB denomination and settlement. In October the same year, the company signed its first contract with a Chinese importer to sell copper denominated in RMB, designating BOC Zambia as the receiving bank. 

In early November 2023, BOC Zambia received the first RMB payment for the goods from the importer. Subsequently, BOC Zambia used part of the RMB funds from the offshore account to pay for equipment procured from China, thus realizing a cycle of "settlement-use-repatriation" for the RMB. In fact, the transaction marked the first copper commodity trade in the DRC to be settled in RMB. It is viewed as an innovative practice by the RMB clearing bank in Zambia to fulfill its duties and expand the scenarios for cross-border RMB use. 

Injecting RMB momentum into China-Serbia commerce 

On May 8, 2024, BOC held the unveiling ceremony of the RMB clearing bank in Serbia in Belgrade. Ge Haijiao, the chairman of BOC, and Jorgovanka Tabakovic, the governor of the National Bank of Serbia, attended the ceremony and delivered speeches. Representatives from over 50 institutions, including the National Bank of Serbia, the Association of Serbian Banks, Chamber of Commerce and Industry of Serbia, as well as Chinese and Serbian enterprises and financial institutions, witnessed this watershed moment. 

The RMB clearing bank in Serbia made contributions to deepening the economic and trade cooperation between the two countries. On June 3 of that year, the RMB clearing bank in Serbia officially commenced operations, connected to the Cross-Border Interbank Payment System (CIPS), and processed its first cross-border RMB remittance — 2 million yuan from Serbia to Hebei province for HBIS Group Serbia Iron & Steel d.o.o Beograd. 

Since BOCHK was appointed as the world's first RMB clearing bank by the People's Bank of China in 2003, BOC has been deeply involved in the construction and development of the offshore RMB market. It currently serves as the RMB clearing bank in 16 countries and regions, the highest number among its peers, spanning five continents — Asia, Europe, Africa, the Americas and Oceania — covering major international financial centers and countries participating in the Belt and Road Initiative. 

BOC actively implemented bilateral and multilateral cooperation outcomes, improved the management for RMB clearing banks, and provided a full range of financial services including RMB clearing and settlements, account and liquidity management, and investment and financing support in local markets. 

BOC won "The Best RMB Clearing Bank in Asia Pacific" awards issued by magazines such as The Asian Banker and The Asset on multiple occasions. In 2024, BOC processed 1,313.83 trillion yuan in cross-border RMB clearing businesses, maintaining its top position globally.