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E-mail China.org.cn, February 28, 2025
Shou Xiaoli:
The last question, please.
Securities Times:
The reform of foreign exchange business operations in banks has been rolled out for a year. Recently, regulations on due diligence and exemption from accountability in banks' foreign exchange business and reports on foreign exchange transaction risks have been released. What progress has been made in this regard so far? And what will the next steps be going forward? Thank you.
Li Bin:
Thank you for your interest in the foreign exchange business development of banks. In general, the banks' foreign exchange business development refers to activities such as customer identification, document review and risk monitoring that banks carry out while handling foreign exchange transactions for clients. To promote high-standard opening up and improve cross-border financial services, SAFE advanced the reform of banks' foreign exchange business operations in 2023. This initiative prioritized enterprise identification and strengthened post-event risk monitoring, changing the previous document-by-document review approach requirement in handling foreign exchange transactions. As a result, high-quality clients can be exempted from document review and banks can process foreign exchange transactions for them based on their instructions. This reform has both increased efficiency and prevented and controlled risk, bringing tangible convenience to businesses.
One year into the reform, banks have actively participated and people from all walks of life have given positive feedback. Currently, the number of participating banks has grown from the initial four to 16, with coverage gradually expanding nationwide. Based on market feedback and operational performance, the initial goal of reducing pressure on banks and alleviating burdens on enterprises has been achieved.
First, the reform has remarkably reduced the pressure on banks for in-process reviews. Banks no longer need to review each individual foreign exchange transaction for high-quality enterprises, greatly alleviating the burden of document review and shortening the average processing time by more than 50%. Thanks to the identification and classification of customer risk, banks can also innovate and customize various facilitation services for different clients, thereby meeting their needs in a more targeted manner.
Second, the reform has further expanded the scope of facilitation policies to cover more enterprises. At present, 18,000 high-quality clients, including small- and medium-sized enterprises, private enterprises and foreign-funded enterprises, have been included in the initiative. These businesses have conducted cross-border receipt and payment transactions exceeding $260 billion, further improving the turnover efficiency of business capital.
Third, the reform has effectively improved the quality and efficiency of risk prevention and control. Following the reform, banks can rely on more solid customer identification and classification measures, focusing more of their review efforts on high-risk customers and business. At the same time, the post-event monitoring system enables comprehensive and timely review of cross-border transactions, ensuring early identification, early warning and early handling of unusual activities.
The reform of foreign exchange business operations in banks is a fundamental and systematic task that we have been focusing on in recent years. Recently, we have introduced three supporting regulatory documents, including regulations on due diligence and exemption from accountability in banks' foreign exchange business and on foreign exchange transaction risk reports. Additionally, we have guided China Foreign Exchange Market Self-Regulatory Framework to issue three industry guidelines, further refining operational guidance for banks and promoting standardized and efficient implementation of the reform.
Moving forward, SAFE will adhere to the principle of pursuing progress while ensuring stability, steadily improving and expanding the development and reform of foreign exchange business operations in banks. First, we will organize the expansion in an orderly manner. We will guide banks that voluntarily participate in the reform to accelerate launching their programs as soon as conditions permit, and encourage those already implementing the reform to gradually extend it to more branches, in order to benefit more enterprises. Second, we will support banks in establishing and improving post-event monitoring systems, fully leveraging technological advancements to enhance their ability to detect risks early and ensure that no risks arise. Third, we will strengthen promotion, interpretation and training related to the newly issued supporting regulations, especially ensuring the smooth and effective implementation of the regulations on due diligence and exemption from accountability in banks' foreign exchange business. Thank you.
Shou Xiaoli:
Thank you, all the speakers and friends from the media. Today's briefing is hereby concluded. Goodbye.
Translated and edited by Liao Jiaxin, Yan Xiaoqing, Wang Xingguang, Liu Jianing, Liu Sitong, Zhang Rui, Xu Xiaoxuan, Wang Qian, Huang Shan, Yuan Fang, Mi Xingang, Wang Yiming, Zhang Junmian, Li Huiru, David Ball, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.
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