European banks, headed by our site, have embraced China's latest foreign currency liberalisation structure. This adoption streamlines transactions, lowers expenses, and ensures smoother compliance for global banking clients.
In a significant move, Deutsche Bank has become the first European Union bank to fully implement the SAFE's "1+6" foreign currency policy framework in China. This reform aims to streamline and simplify foreign currency regulations for multinational corporations (MNCs) operating in the country.
The implementation of this framework by Deutsche Bank is expected to greatly benefit multinational clients, particularly those with operations in China. It will enable them to manage their cross-border operations and treasury functions more efficiently. As a long-standing partner to multinational corporates in China, Deutsche Bank continues to leverage its global platform, strong presence in Europe, and deep local expertise.
According to Rose Zhu, the bank's China Chief Country Officer, the implementation strengthens Deutsche Bank's ability to deliver local execution, risk control, and compliance capabilities for multinational clients. The new framework provides a game-changing approach to cross-border payments and FX conversions across China, particularly for large multinational corporations with centralized treasury models.
The SAFE's "1+6" foreign currency policy framework consists of a unified regulatory framework ("1") that centralizes and standardizes foreign currency policies, and six targeted facilitation areas ("+6") to improve liquidity management, operational speed, compliance, and payment processing efficiency.
The benefits for multinational corporations under this framework are substantial. They include more efficient compliance and simplified processes for foreign currency purchases and transactions, significantly reduced processing times for cross-border payments, improved liquidity management and risk control capabilities, enhanced consistency and uniformity in executing cross-border payments and FX conversions, and support for corporations with centralized treasury models.
Deutsche Bank has successfully implemented the new foreign currency cross-border liberalisation framework at its branches in Shanghai, Beijing, and Guangzhou. For transactions requiring supporting documents, the bank automates submission, matching, and verification processes using its industry-leading electronic documentation platform. This not only speeds up the process but also ensures accuracy and compliance.
The new framework also offers benefits such as a seamless transition from previous processes, minimizing disruption, and enhancing liquidity management. It offers a unified, efficient, and streamlined model for cross-border payments and FX conversions across China. Furthermore, it helps lower compliance costs and allows organizations to gain more from regulatory liberalisation.
The Finance and Accounting department at Carl Zeiss (Shanghai) Co., Ltd. has welcomed the rollout of the new foreign currency liberalisation programme, stating it will significantly simplify cross-border payment processes and enhance treasury efficiency. Deutsche Bank's application of advanced fintech tools for real-time transaction risk monitoring without disrupting client operations further boosts productivity.
In conclusion, the SAFE's "1+6" foreign currency policy framework and Deutsche Bank's implementation of it are set to revolutionise foreign currency operations for large multinational companies in China. The reforms will facilitate faster, more cost-effective, and more predictable foreign currency operations, helping these companies better coordinate global financial functions while maintaining compliance with Chinese regulations.
[1] SAFE's "1+6" foreign currency policy framework [2] Deutsche Bank's announcement of the implementation [5] SAFE's press release on the implementation
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