Taipei, Dec. 14, 2012 (CENS)--The Financial Supervisory Commission (FSC) decreed yesterday (Dec. 13) permitting designated banking units (DBUs) to undertake renminbi-related businesses. Following the launch of cross-Taiwan Strait currency clearance mechanism, DBUs can, without need of application, use renminbi for conducting existing foreign-currency businesses, including deposit, loan, remittance, trade settlement, and wealth-management products.
Chiu Shu-chen, deputy director general of the Banking Bureau, FSC, expressed that the FSC issued decree to Bankers Association yesterday for notifying banks about the liberalization move.
Chiu noted that after the inauguration of cross-Taiwan currency clearance mechanism, DBUs can use renminbi to carry out all foreign-currency businesses. DBUs can also design renminbi-denominated wealth-management products for sale to investors.
For instance, many banks are undertaking U.S. dollar-Australian dollar dual-currency products; in the future, they can push U.S. dollar-renminbi dual-currency products. Banks can design and push renminbi-denominated wealth-management products, without need of application, so long as they conform to existing regulations, according to Chiu.
Following designation of the Taipei branch of the Bank of China (BOC) as the renminbi-clearance bank in Taiwan, the Central Bank of China will publicize related detailed regulations and the Taipei branch of BOC will sign contracts with domestic participating banks. After completion of preparatory works, DBUs can start to undertake renminbi-related businesses following the launch of cross-Strait currency clearance mechanism.
Domestic banks are gearing up to capitalize on the new business opportunities. In addition to the listing of interest rates for renminbi deposits and exchange rates for renminbi remittances, some banks are also designing renminbi-denominated structural-type deposits.
Most domestic banks will focus on renminbi deposits, remittances, and loans in the initial stage before rolling out renminbi-denominated wealth-management products later on. However, some banks plan to launch renminbi structural-type deposits and dual-currency products from the beginning.
(by Philip Liu)
