For the purposes of enlarging the cross-border use of RMB, regulating relevant business of RMB loans of domestic banking institutions (hereinafter referred to as “banks”) for overseas projects, preventing risks, and promoting trade and investment facilitation, the following guidelines are formulated according to the Law of the People’s Republic of China on the People’s Bank of China, to guide RMB lending of domestic banking institutions for overseas projects.
1. Overseas Projects in these Guidelines refer to the various overseas investments and other cooperation projects carried out by domestic institutions in the process of “going global”, including, but not limited to, direct overseas investments, contracted engineering projects for foreign parties, export buyer’s credit, and etc.
Direct overseas investments are domestic institutions’ act of establishing enterprises or projects or obtaining the ownership, controlling stake or right to participate in the management, etc. of such enterprises or projects by way of establishment of wholly-owned, joint venture or cooperative enterprises or projects, merger, equity investment and acquisition, and etc.; “contracted engineering projects” mean the overseas construction engineering projects with a Chinese enterprise or other entity as a party to the contract, including the activities of consulting, survey, design, supervision, calling for bids, estimation of costs, purchase, construction, installation, trial run, operation and management, etc.
RMB bank loans for overseas projects mean the RMB loans granted by banks to the aforesaid overseas projects.
2. The banks that can conduct international settlement and have the experiences of granting loans to foreign-related entities may, after being connected with the Cross-Border RMB Receipts and Payments Information Management System (RCPMIS), carry out RMB lending business for overseas projects.
3. When a bank handles the RMB lending business for an overseas project it shall, within 15 working days after signing the RMB loan contract for the overseas project, submit a photocopy of the contract to local branch office of the PBC. For banks that carry out the RMB lending business for the overseas project for the first time, they shall also submit photocopies of relevant internal rules and regulations.
4. Banks shall, when handling the RMB lending business for overseas projects, comply with the principle of prudence, strictly examine the credit standing of the borrowers and the corresponding banks, and protect the safety of the funds.
5. Banks may open RMB bank settlement accounts for overseas borrowers, and manage the accounts according to the Administrative Rules for RMB Bank Settlement Accounts of Overseas Institutions (PBC Document No.249 [2010]). Banks may also handle the RMB lending business for overseas projects via the corresponding accounts opened by borrowers in overseas agent banks.
6. Banks shall, according to relevant provisions on RMB bank settlement accounts and payment and settlement management, provide fund transfer and other relevant services for cross-border RMB loans to the filed projects.
7. Banks may allot RMB funds to its overseas branches or provide RMB financing to its overseas subsidiaries or corresponding banks to meet the need of overseas project lending business.
The accumulative amount of RMB loans provided by a bank to an overseas project shall not exceed the amount as specified in the project loan contract. The RMB funds repatriated from overseas to a bank due to loan repayments by the overseas borrower, overseas branch offices and agent banks shall not exceed the sum of the principal and reasonable incomes under the filed loan contract.
8. The funds of RMB lending for overseas projects shall not be used for providing domestic loans.
9. The statistics of RMB loans for overseas projects shall be made separately, and the lending interest rate shall conform to relevant provisions of the PBC.
10. Non-resident deposits arising from the RMB lending business for overseas projects are not subject to existing administrations on foreign debts.
11. Banks shall report the relevant information of its RMB lending business for overseas projects to the Cross-Border RMB Receipts and Payments Information Management System within 5 business days.
12. The PBC and its branch offices shall make on-site and off-site inspections on banks’ RMB lending business for overseas projects, urge banks to earnestly fulfill their duties of verifying authenticity of the project loans and information reporting, and etc., so as to supervise banks to carry out their business activities according to the law.
13. The PBC and its branch offices shall, according to these Guidelines, guide banks to conduct businesses related to providing RMB loans to overseas projects.
October 24, 2011
