1. Forex Clearing Service for Foreign Banks
By opening forex accounts with China Construction Bank (CCB), foreign banks are able to conduct forex fund transfers and relevant inquiries within Mainland China through CCB’s clearing system.
CCB currently undertakes the roles as the HK dollar settlement agency bank for the PBOC and the US dollar settlement agency bank for the China FX Trading Center, and was also the first bank among the four designated settlement banks to get the agency service operation online. The system has been stable, which realizes separate account opening function and centralized management.. With swift business shifts and good branch management, it has greatly promoted the domestic foreign currency payment business.
In the business interconnection and mutual communication between the mainland and HK promoted by the PBOC and HKMA, CCB undertakes the role as the HK dollar, a major currency of the promotion, settlement bank.
CCB's clearing system consists of approximately 38 clearing centers (groups) that are further connected to over 2,000 branches at provincial level and more than 13,000 deposit-taking outlets. It possesses capabilities of differentiating corporate and private customers and automatically judging consistency of accounts and account names. By directly transferring inward remittance to payee’s account, the system is able to streamline workflows and improve efficiency. It also features broad coverage, guaranteed security, swift transfer, and full information.
The service only applies to foreign banks that conduct forex fund transfers within Mainland China. Since its appearance, Forex Clearing Service for Foreign Banks is widely appreciated by CCB’s customers.
2. RMB International Clearing Service for Foreign Banks
With the support of its own clearing system and the PBOC’s payment and supervision system, CCB can be entrusted by foreign banks to open RMB clearing accounts with CCB, providing RMB Intl. clearing service for clients of both parties.
CCB maintains strategic cooperation with many enterprises enjoying the international trade pricing power and has strong client base for RMB international settlement business. With the support of the advanced system and experienced teams, CCB is able to provide customized service plans.
CCB’s excellent performance & recent achievements on RMB Intl. Clearing business :
◆ CCB successfully implemented the pilot program of RMB Intl. Settlement in July, 2009.
◆ CCB created the records of highest single transaction volume of RMB Intl. settlement in Nov, 2009 and Dec, 2009 respectively.
◆ CCB enjoys the leading position among the domestic peers by taking more than 50% of the market share.
Processes and Procedures:
1. To sign the Clearing Agency Service Agreement
2. To submit the relevant account opening materials
3. To open an RMB account
4. To do business
3. Foreign Bank Deposit Service
China Construction Bank (CCB)'s Foreign Bank Deposit represents balances denominated in RMB or Foreign Currency that foreign bank branches in China keep on their accounts with CCB. The tenors fall into five categories: demand, 7days, 1month, 3 months and 6months. Among them, deposits with a tenor of six months are also entitled Foreign Bank Capital Deposit.
Foreign Bank Capital Deposit Service refers to the service targeted against all foreign bank branches in China that have set up either foreign currency or RMB currency operations, with an aim to facilitate the need of foreign bank branches for the required capital deposit as stipulated by PBOC in its published Detailed Implementation Rules for the Regulation on Foreign Financial Institutions in China (the Rules hereafter).
According to the Rules, all foreign bank branches, for their foreign currency operations, have to place 30% of their foreign currency capital with no more than 3 local commercial banks while for their RMB operations, another 30% of RMB capital has to be deposited with similar local commercial banks or to be placed in the form of treasury bonds. As one of the big Chinese commercial banks with sound operation and certain financial strength, CCB is not only keen but also qualified in providing such service.
CCB, as one of the first few domestic banks that were allowed to start this service, has been the market leader in this regard and has established long-term good relationship with major foreign banks in China. In providing capital deposit facilities, CCB is flexible in pricing by offering negotiable rates, i.e. interest rates adjusted to the LIBOR in reference to the market situation. In leveraging its competitive advantage, CCB may also provide tailor-made arrangements catering to special customer needs.
4. Loan Service against Standby L/C
China Construction Bank (CCB)'s loan service against standby L/C refers to the loan extended to foreign funded corporations by CCB and guaranteed by foreign banks in the form of standby L/C. Standby L/C is a kind of letter of guarantee characterized by unconditional sight payment in case of the debtor's failure to repay the loan. According to UCP500, the terms and conditions of standby L/C should be expressed in the form of documents and therefore they are clear, free of equivocation and easy to fulfill. Since a standby L/C is issued by a bank and represents guarantee provided to the beneficiary by the issuing bank, it is one of the most reliable guarantees and is very popular in international banking business.
Loan against standby L/C is an important business for CCB to strengthen cooperation with foreign banks and to attract such customers as foreign funded corporations, especially multinationals. Through this product, foreign banks will be able to extend their services to meet the fund needs of their customers while CCB can enlarge its customer base.
Since 1997, CCB has actively expanded this business. Up to now, CCB has accepted Standby L/Cs from more than 100 foreign banks with a value of over USD 7 billion and provided loans against such guarantees to more than 500 foreign-funded companies with a value of over RMB 60 billion. Now, CCB has authorized 37 branches to conduct the business directly with foreign banks and customers. With the customer-friendly procedures, standardized form of standby L/C and competent employees, CCB anticipates more cooperation with its foreign counterparts and steady growth in this area.
5. Draft Rediscount Service
The draft rediscount service is the negotiation of drafts whereby a foreign bank applying for the rediscount (Applying Bank) endorses and transfers discounted and immature commercial drafts or banker's acceptances to China Construction Bank（CCB）, who then deducts the rediscount interest from the amount of the aforesaid drafts and pays the balance to the Applying Bank.
The drafts for rediscount must meet the following requirements:
◆ It is drawn under genuine and legal trade transactions, while its issuance and negotiation are done with honesty and creditworthiness;
◆ Its use, maturity and the maximum amount comply with the relevant regulations stipulated by the People's Bank of China;
◆ It is endorsed by the Applying Bank, and its continuity must be ensured for the endorsements made by the Applying Bank and the applicant of the initial discount or other endorsers.
Before applying for the rediscount service, the Applying Bank should sign with CCB the Agreement for Drafts Rediscount. In addition, the Applying Bank should present the following documents:
◆ Check Form for Rediscount by CCB;
◆ Rediscount voucher affixed with a stamp that has been pre-recorded on file with the rediscount department of CCB;
◆ The discounted commercial draft duly endorsed by the Applying Bank or the accepted bank draft;
◆ Photocopies of any value-added tax invoice, bill of lading or trade agreement between the initial discount applicant and the drawer of the draft or previous endorsers;
◆ In case the draft for rediscount is a banker's acceptance, photocopies of the inquiry and reply statement for banker's acceptance must also be presented;
◆ Photocopies of vouchers for the initial discount of the draft;
◆ Other documents as required by CCB.
Upon receiving the above documents, CCB will process the rediscount within two working days and pay the proceeds into a RMB account specified by the Applying Bank, provided everything is in order.
The rediscount period spans from the rediscount date to the maturity date of the draft. The actual amount paid by CCB is the face value of the draft less the interest calculated for the period from the value date of the rediscount transaction to one day before the maturity of the draft (or the next working day in case the maturity date falls on a holiday). The formula is
Rediscount Amount Paid = Face Value of the Draft x (1-Monthly Rediscount Interest Rate / 30 x Number of Days for Rediscount)
In case the acceptor of the draft is located in a different town, another three days, i.e., the time needed for funds transfer, should be included in the calculation of the rediscount period and the rediscount interest.