Deutsche Bank joins China’s foreign currency trade payments pilot scheme

October 12, 2020.

said Monday that it has become the first European bank to secure approval from China to join its pilot scheme for the facilitation of foreign exchange receipts and payments for trade, which aims to “simplify and improve” foreign currency payments for cross-border trades.

Now that the bank is part of the State Administration of Foreign Exchange's foreign currency trade payments pilot program, clients of Deutsche Bank China’s Shanghai branch will no longer need to provide supporting documents for foreign currency trade payment “up front,” Germany’s largest bank said. 

This “straight-through payment processing upon the client’s e-banking instruction” allows for a shorter foreign currency payment processing time, Deutsche Bank said. Traditionally, the payment procedure takes days, but it will now be reduced to a couple of minutes, according to the lender.

“The successful approval for the foreign currency trade payments pilot scheme is solid testimony to our local market expertise and commitment,” Deutsche Bank China Head of Corporate Cash Management Alvin Ho said. “Deutsche Bank in Shanghai is one of only a few banks that offer clients both capital account and trade account pilot solutions.” 

“We will continue to leverage our information technology capabilities to provide convenient, efficient and secured one-stop cross-border payment solutions to our clients,” Ho said. 

The bank said it completed its first foreign currency payment under the scheme for Aptiv, an Ireland-based automotive technology company, on Sept. 30 this year.

“Cross-border foreign exchange payments have been a lengthy process for corporates,” Asia Pacific Chief Financial Officer of Aptiv Jerry Chen said. “With Deutsche Bank’s pilot scheme services, we see the direct benefits with faster and easier payments.” 

“As Aptiv’s banking partner, Deutsche Bank has provided us with a tailor-made pilot solution, which improved the overall process throughout the payment cycle and it is a testament to Deutsche Bank’s professionalism and commitment,” Chen said. 

Since the rollout of the pilot program, 192 enterprises from Beijing, Shanghai, Guangdong, Shenzhen, Jiangsu, Ningbo, Shandong and Zhejiang have “benefited” and 22,000 foreign exchange receipts totaling $24.3 billion and 32,000 foreign exchange payments worth $20.5 billion have been “handled," SAFE said in January. 

“Further, the pilot program boosts banks to shift from ex-ante review to ex-post review, which has simplified the manual review processes while enabling banks to intensify surveys, assessment, and ongoing and ex-post verification of customers, thus improving banks' risk control capabilities,” the regulator said at the time. 

Deutsche Bank’s presence in China dates back to 1872, when it opened its first overseas office in Shanghai. The bank’s China unit is headquartered in Beijing, and Deutsche Bank (China) was incorporated as a wholly-owned subsidiary of Deutsche Bank in 2008. Currently, the bank has branches in Beijing, Shanghai, Guangzhou, Tianjin, Chongqing and Qingdao.

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