OREANDA-NEWS. July 18, 2012. Earlier, Bank of the Lao PDR ("Central Bank") announced that ICBC Vientiane Branch is the sole RMB-clearing bank in the country acting on behalf of the central bank. According to the central bank's decision, the next move of ICBC Vientiane Branch is to offer services for banks, companies, individual customers in Laos to open RMB accounts for remittance and clearing between Laos kip and RMB according to their requirements, reported the press-centre of ICBC. 

The Branch is responsible for the clearing of RMB transactions between Laos and China. The decision by Bank of the Lao PDR to appoint a branch of Chinese bank to be the RMB-clearing bank will drive the healthy growth of bilateral RMB settlement between the two nations, said industry insiders. It will change the current situation where RMB transactions in Laos are mainly settled in cash, and provide a good platform for the extensive use of RMB in Laos.

Bilateral relations between China and Laos have witnessed sound development and good prospect in recent years. Bilateral trade has surged from USD 130 million in 2005 to over USD 1.36 billion last year. China has become Laos' largest foreign investor with investment in 443 projects totaling USD 4.052 billion since 1989. The use of RMB for trade settlements between China and Laos has been increasing at a reasonable pace driven by the fast growth of bilateral trades and RMB cross-border settlements between the two countries. The direct Laos kip-RMB exchange began in China starting from June 2011, paving the way for the use of RMB or trade settlements between China and Laos.

ICBC Vientiane Branch, the only Chinese bank in Laos appointed as the sole RMB-clearing bank in Laos, indicates the high priority of Laos regulatory authority on cross-border RMB settlements and the recognition to the Branch's expertise in RMB business. Being the largest RMB bank in the world, during the last few years ICBC has concentrated on expanding its cross-border RMB business beyond national borders, said an executive with ICBC. Well-capitalized ICBC, the No.1 bank in the world when it comes to total RMB assets and settlements, is able to provide enough RMB funds for lending and competitive loan rate to customers. In IT system and support, ICBC is the first commercial bank in China to centralize the processing of domestic and overseas businesses under one platform, offering real-time clearing in home and foreign currencies for transfer/remittance and settlements.

All outlets around the world are connected for real-time credit of money. This lays a solid foundation for ICBC to become a global RMB clearing bank besides providing fast, convenient, highly-efficient settlement services for the customers. Given such a strategic opportunity to move forward cross-border RMB business, ICBC looks at the customer requirements and embraces innovation. Numerous innovative RMB services allow ICBC to act first while spreading its swings across the border. That include: issuance of the world's first usance L/C, first cross-border RMB loan and first RMB bond issuance in Hong Kong with renminbi flowing back to the Mainland, first open direct trading between RMB and rouble in overseas FX market, first cross-border RMB leasing project, and the first bank in the country to manage RMB-denominated central reserve for a foreign country.

Worthy of note is that, ICBC follows the customers to "go global" and builds its own global network. ICBC's global RMB service network comprises 244 overseas subsidiaries in nearly 40 countries/territories, and 1,453 correspondent banks in 139 countries/territories. From July, 2009 since the pilot of cross-border RMB services, until the end of first quarter of 2012, ICBC posted over RMB 1.5 trillion in cross-border RMB settlements. ICBC ranks No.1 among all banks with a RMB clearing network covering 59 countries/territories.