A view of DBS Bank in Shanghai in March. Photo: VCG

Singapore-based DBS Bank announced that it has been authorized by the People's Bank of China (PBC), the country’s central bank, to act as the yuan clearing bank in Singapore— making it become the first Singaporean lender to secure this designation. In addition, DBS Bank has also been approved to participate in over-the-counter transactions in China's interbank bond market for overseas institutions, the bank said in a statement sent to the Global Times on Tuesday.

That would make DBS Bank the second yuan clearing bank in Singapore. The Singapore branch of the Industrial and Commercial Bank of China was appointed as the first clearing bank for yuan in Singapore by the PBC in 2013, the Standard reported. 

“As customer demand for diversified currency allocation and usage continues to rise, DBS Bank, leveraging this significant milestone, will be able to offer more comprehensive and competitive yuan solutions that effectively address real market needs. Customers will gain access to more efficient channels for RMB settlement and cross-border usage, thereby promoting greater investment connectivity, interoperability, and financial innovation across the Asian region,” the company said.

It also noted that the approval will enable the bank to directly access onshore yuan liquidity support in China, enabling it to provide more integrated and comprehensive yuan services, allowing customers to invest more conveniently in a wide range of yuan-denominated financial instruments while seamlessly bridging onshore and offshore yuan business needs.

At the same time, leveraging Singapore's position as a leading global foreign exchange trading center, DBS Bank can also offer customers greater operational convenience, superior liquidity support and a broader array of settlement options to meet their evolving needs in asset allocation and risk management, the bank noted.

With regards to being approved to participate in over-the-counter transactions in China's interbank bond market, DBS Bank said it can assist clients in conducting onshore bond trading in China and provide offshore custody services. 

“This development enhances the efficiency for overseas investors accessing the Chinese bond market, significantly improving transaction convenience and offering more diverse and efficient channels for investing in onshore Chinese bonds,” the bank noted.

Global Times