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RMB Settlement in Cross-border Trade

SRCB follows the people's Bank of China's "RMB trade settlement pilot management approach","cross-border RMB trade settlement pilot management approach" and the detailed rules for the implementation of our management regulations, as “a domestic settlement bank" for enterprise customers for take the RMB as the settlement currency of international settlement business under the cross-border receipt and cross-border payment settlement business.

Settlement method: 
SRCB’s Cross-border RMB business is settled through 'PBOC Settlement Method' at present.
"PBOC Settlement Method"  refers that SRCB helps the corporate customers to do cross-board RMB settlement business via PBOC CNAPS system to settle in the RMB Settlement Bank offshore (i.e. Bank of China (Hong Kong) and Bank of China Macau Branch).

Business types:
Shanghai rural commercial bank cross-border RMB settlement business includes the following types:

Remittance: outward and inward payment
Documentary collection: import and export collection
Letter of Credit: import and export LC

Product features:
1. To increase choice of settlement currency; To avoid the exchange rate risk; and there is no need to do foreign exchanges for the business.

Early domestic enterprise can only use foreign currency settlement for import and export. Since the global financial market experiences great volatility, corporates easily made loss in the foreign currency exchange. As RMB is the onshore currency, using RMB to settle for international trade will help the corporates the avoid the foreign currency exchange risks

2. To speed up the settlement and improve fund usage efficiency

The settlement is conducted on shore with clear settlement path and no time difference. The fund used for trade finance and for production shares the same nature, which will shorten the fund transfer process, speed up the settlement and fund turnover, and increase the fund usage efficiency so that the corporate will manage its money more effectively.

3. To help enterprise with the cost financial accounting 
The consistency of contract valuation currency and enterprise operational currency, helps the corporate to understand its cost and benefit for the deal before the contract is signed. It can increase the decision-making period and to reduce the cost for FX business and FX hedging business.

4. To enjoy advantages of export tax refund, preferential policies for foreign exchange check-offs, and reasonably avoid foreign exchange control.
All the import and export goods trade in the RMB settlement only needs declaration. Domestic pilot corporates can all enjoy goods export tax refund (or exemption) policy according to the relevant regulations, and do not include in the management of foreign exchange check-offs, so the corporates do not need to submit the foreign exchange check-off sheet for the application and cancellation.

5. To comply with looser regulations and easier procedures to reasonably avoid foreign exchange control
Corporates do not need to open special account and only use the original RMB settlement account to deal with cross-border RMB business. Advanced receipt, advanced payment, deferred receipt and deferred payment do not need to conduct trade credit registration, are not included in the foreign debt management and do not use the foreign debt quota.
Do not include in foreign debt management, do not take foreign debt index.

Applicable Condition:
sound import and export corporates with good settlement and credit records in SRCB
Listed pilot corporates for goods export trade.

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