HSBC offers RMB settlement deals in India
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HSBC Bank has offered renminbi 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 renminbi settlement arrangements enable importers to pay imports through Indian rupees or China's renminbi without the involvement of US dollars, helping drive down transaction costs and avoid exchange risk.
Until now, HSBC has done three renminbi settlements via HSBC offices in Hong Kong, said Bill Susinski, head of international business with HSBC India's commercial banking operations.
Susinski said renminbi 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 renminbi accounts in India.
Once approved, renminbi 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 renminbi 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 renminbi in the $60-billion China-India bilateral trade.
Montgomery Ho, managing director with commercial banking of HSBC Bank (China), said the employment of renminbi settlement will cut transaction cost and keep off exchange risk and holder of renminbi could gain from expected appreciations of renminbi.
Ho said Hong Kong now has a big renminbi pool as an offshore renminbi center and financial instruments could be developed in the future when the renminbi pool is big enough.
Currently, HSBC Bank could provide renminbi 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 renminbi thanks to its worldwide network.
Now, HSBC Bank is the second largest foreign bank in India with 46 branches in 25 states.
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