HSBC kicks off RMB settlement deals in India

17:50, December 04, 2010      

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HSBC Bank has offered RMB settlement for Indian importers, said Stuart Davis, CEO of HSBC in India.

Speaking on the sidelines of a bankers' conference in Mumbai, Davis told Xinhua that the deals are medium-sized and it will take time to gain liquidity in this regard.

The RMB settlement arrangements enable importers to pay imports through Indian rupees or China's RMB without the involvement of U. S. dollars, helping drive down transaction costs and avoid exchange risk.

Until now, HSBC has done three RMB settlements via HSBC offices in Hong Kong, said Bill Susinski, head of international business with HSBC India's commercial banking operations.

Susinski said RMB settlement could be conducted only through Hong Kong and HSBC is waiting for the approval from the Indian central bank to allow Indian companies to open RMB accounts in India.

Once approved, RMB settlement transactions will pick up speed of growth, according to Susinski.

Susinski added that there're more than 1,700 Indian companies incorporated in Hong Kong, where they can open RMB accounts now.

HSBC Bank (China) Company also made a presentation to Indian business people on Friday in Mumbai with the aim to promote the use of RMB in the 60-billion U.S. dollars China-India bilateral trade.

Montgomery Ho, managing director with commercial banking of HSBC Bank (China), said the employment of RMB settlement will cut transaction cost and keep off exchange risk and holder of RMB could gain from expected appreciations of RMB.

Ho said Hong Kong now has a big RMB pool as an offshore RMB center and financial instruments could be developed in the future when the RMB pool is big enough.

Currently, HSBC Bank could provide RMB settlement services in more than 30 countries across the world.

Earlier this year, Aditya Puri, CEO of India-based HDFC Bank, called for the use of local currencies in bilateral trade between China and India to reduce transaction cost and time of settlement.

HSBC Bank has been one of front-runners to spearhead the internationalization of RMB thanks to its worldwide network.

Now, HSBC Bank is the second largest foreign bank in India with 46 branches in 25 states.

Source: Xinhua


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